Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia has announced that the construction of PT Bukit Asam’s (PTBA) dimethyl ether (DME) production facility could begin next year, pending a final decision expected next month. 

Bahlil emphasized that the project is crucial as national LPG consumption is projected to rise by 1.2 million tons, reaching around 10 million tons by 2026, following the operation of PT Lotte Chemical Indonesia’s plant this month. The DME project aims to replace imported liquefied petroleum gas (LPG) and strengthen Indonesia’s energy independence.

“The national LPG production capacity stands at around 1.3 to 1.4 million tons per year, which means next year’s LPG deficit could reach 8.6 million tons. We will hold a meeting with the Minister of Investment and President Prabowo Subianto to finalize the decision on PTBA’s DME development next year,” Bahlil said at the House of Representatives (DPR) building on Tuesday, November 11, 2025.

He added that the upcoming meeting with the President will also determine the plant’s location and the technology provider for the DME facility. The Indonesian government will directly fund the DME investment, he confirmed.

The DME project is part of 18 downstreaming projects approved by the government, with total investments valued at Rp618 trillion. Funding will be sourced from State investment management agency BPI Danantara.

“About 90 percent of this investment will go toward the downstreaming of mineral, coal, oil, and gas sectors, including the construction of the DME plant,” Bahlil noted.

The PTBA DME project alone is estimated to require Rp164 trillion in investment. The coal gasification plant is planned for several regions, including Bulungan, East Kutai, and Kotabaru in Kalimantan, as well as Muara Enim, Penukal Abab Lematang Ilir, and Banyuasin in Sumatra.

Previously, Air Products and Chemicals Inc., a U.S.-based gas and chemical processing company, withdrew from two coal downstreaming projects in Indonesia due to high coal prices making the ventures uneconomical.

Investment Minister Rosan P. Roeslani said further evaluation is needed to ensure cost efficiency and identify potential partners for Danantara.

“This DME project was previously launched and even reached the groundbreaking stage but was later halted. Danantara does not want that to happen again,” Rosan, who is also CEO of Danantara, said at the Merdeka Palace on November 6, 2025.