Chinese firms study coal gasification project in Indonesia

The Ministry of Energy and Mineral Resources (MEMR) says four Chinese companies are conducting studies on coal gasification to dimethyl ether (DME) projects as an alternative to liquefied petroleum gas (LPG).The results of the studies varied from enterprise to enterprise, with some concluding that the project was not feasible in Indonesia and others coming up with different internal rates of return. The Ministry of Energy and Mineral Resources has asked these companies to provide examples of their calculations so that the project study is not just a paper exercise. Countries are now prioritizing their national interests more, with the chairman of the relevant parliamentary committee advising the government not to rely on just one country in advancing the technology for the Indonesian coal DME project, which the energy minister has mentioned will use technology transfers from the U.S. and China. Previously, the project, which was managed by PTBA and invested by APCI of the United States, was planned to produce 1.4 million tons of DME per year, but APCI withdrew in 2023, leaving the fate of the project uncertain and previously criticized by many as being uneconomical due to the high cost of substituting for imported LPG and the high cost of the technology, a view similarly expressed by the executive director of the Indonesian Mining Association (IMA).