Air Products and Chemical Inc. has decided not to pursue two downstream coal development projects in Indonesia. The company decided to withdraw from its coal gasification into DME collaboration with PT Bukit Asam Tbk (PTBA) and PT Pertamina. It also decided not to continue their engagement in developing methanol gas production facility in cooperation with Bakrie Group companies, PT Kaltim Prima Coal and PT Arutmin Indonesia.
“Air Products left because it feels more interesting to do business in the United States,” said Energy and Mineral Resources Minister Arifin Tasrif, explaining the company’s decision.
According to him, the company chose to invest in renewable energy projects in the US because the incentives offered by the US government were more attractive than the incentives they could get in Indonesia. “The US incentive is more interesting than other countries, such as the inflation reduction act. That’s why investors run there,” he added.
Even though the US company has left Indonesia’s coal gasification project, Tasrif said Indonesia would continue the coal gasification projects and other downstream industry development.
Commitment to PT Bakrie Capital Indonesia, PT Kaltim Prima Coal, and PT Arutmin Indonesia
Previously, the US company Air Products and Chemical Inc. was committed to develop methanol production facility in Bengalon, East Kalimantan. Company spokeswoman Jessica Cheng said Air Products would invest US$2 billion to build, own, and operate the air separation, gasification, syngas (synthetic natural gas) utilities, and methanol production assets.
In this project, Air Products was agreed to cooperate with PT Bakrie Capital Indonesia, a subsidiary of Bakrie Group, and PT Ithaca Resources, a subsidiary of PT AP Investment. Under a long-term on-site contract, both companies agreed to supply the coal feedstock and have committed to off-take the methanol production for sale within Indonesia,” she said in a statement to Indonesia Business Post on May 17, 2022.
This facility – including Air Products’ proprietary Syngas Solutions™ dry-feed gasifier – will enable the company to produce nearly two million tons of methanol per year (TPY) of almost six million TPY of coal. The project is expected on stream in 2024.
“As Southeast Asia’s largest economy, Indonesia is committed to reducing its energy imports and efficiently converting abundant coal resources into high-value products. We are proud to have been awarded another world-scale gasification project, where we will deploy our capital, technology, and operational expertise to help Indonesia meet these important goals,” stated Air Products Chief Executive Officer Seifi Ghasemi, to Indonesia Business Post on May 17, 2022.