Minister Of Energy And Mineral Resources Targets The Coal Gasification Project To Operate In 2027

Minister of Energy and Mineral Resources Arifin Tasrif. (Photo: Doc. Antara)

JAKARTA - Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif explained that the coal gasification project of PT. Bukit Asam (PTBA) to become Dimethyl Ether (DME) is targeted for Commercial Operation Date (COD) in the fourth quarter of 2027.

"PTBA will produce DME of 1.4 million tons per year with coal raw materials of 6 million tons per year," Arifin told reporters in Jakarta, Tuesday, November 22.

Arifin said the impact on the government is quite large if the coal gasification project is already operational, namely it can reduce imports of Liquefied Petroleum Gas (LPG) by 1 million tons per year, so that there will be savings in LPG import foreign exchange of IDR 9.1 trillion per year, and will increase investment by 2.1 billion US dollars.

"Similarly, in terms of employment, in the construction stage of the coal gasification project into DME, 10,600 workers will be absorbed, while in the operational stage it will absorb 8,000 workers," he said.

Meanwhile, Arifin said that the benefits for PTBA are the use of low-calorie coal, GAR<4000 calories, which so far has a low selling value.

Then, PT Pertamina (Persero) as the absorber of DME products, will get a margin of sales and become the only distributor of DME sales.

However, to smooth the operation of this coal gasification project, Arifin said the project needed regulatory and incentive support, namely, reducing coal royalties rates specifically for coal gasification by up to 0 percent.

"The Ministry of Finance has approved the principle permit, but it cannot be followed up because it still has to wait for the revision of the Job Creation Law," he said.

In addition, special coal price regulations are needed to increase added value for gasification purposes implemented in the mouth of the mine.

Then another support is in the form of a draft Presidential Regulation on the Provision, Distribution and Determination of DME Prices as fuel following the provisions of the oil and gas sub-sector.

"The preparation process has entered the harmonization stage led by the Ministry of Law and Human Rights, and has been carried out twice, but there are still issues related to the financing of the first package and the obligation to provide subsidies," he concluded.

For information, the PTBA coal gasification project has become a National Strategic Project in Presidential Decree No. 109 of 2020 dated November 20, 2020. And President Joko Widodo has carried out a groundbreaking on January 24, 2022.