Air Products to invest $2bn for coal-to-methanol project in Indonesia

Air Products to build, own and operate facilities and supply methanol under long-term contract, enabling conversion of natural resources into higher value products

Seifi Ghasemi, Air Products’ chairman, president and chief executive officer.
Seifi Ghasemi, Air Products’ chairman, president and chief executive officer.

Air Products announced it has signed a definitive agreement for a long-term on-site contract for a world-scale coal-to-methanol production facility in Bengalon, East Kalimantan, Indonesia.

Under the long-term on-site contract, PT. Bakrie Capital Indonesia, part of the Bakrie Group, and PT. Ithaca Resources, part of the PT. AP Investment, will supply the coal feedstock and have committed to offtake the methanol production for sale within Indonesia. Air Products will invest about $2bn to build, own and operate the air separation, gasification, syngas clean-up, utilities and methanol production assets to produce methanol for Bakrie and Ithaca. This facility, including Air Products’ proprietary Syngas Solutions dry-feed gasifier, will enable nearly two million tonnes per year (TPY) of methanol to be produced from nearly six million TPY of coal. The project is expected onstream in 2024.

Seifi Ghasemi, Air Products’ chairman, president and chief executive officer, said, “As Southeast Asia’s largest economy, Indonesia is committed to reduce its energy imports and efficiently convert 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. This is another example of our long-term strategy to deploy capital into high-return strategic industrial gas projects.”

Dr Samir Serhan, Air Products’ executive vice president, added, “Our core competency is our ability to develop, execute, own and operate complex process facilities that help our customers create engines of economic growth and social development. We look forward to supporting Bakrie and Ithaca in this game-changing megaproject that will provide methanol for domestic consumption to support Indonesia’s sustainable economic growth.”

Adika Nuraga Bakrie, PT. Bakrie Capital Indonesia’s chief executive officer, together with Agoes Projosasmito, PT. Ithaca Resources’ president director, said, “We are very proud to collaborate in this strategic project with Air Products, the world leader in coal gasification. In line with President Joko Widodo and the Government of Indonesia’s plan, there is strong momentum for this project, which will produce high-value methanol from abundant, low-value coal reserves. Furthermore, we are very encouraged by the government’s support for developing cutting-edge technology and products in the Eastern Region, which will contribute to the overall sustainable economic development of Indonesia.”

Air Products continues its leadership in gasification projects around the world. In addition to the new project in Indonesia, Air Products is executing a number of gasification projects in China as well as the Jazan project in Saudi Arabia.

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