Indonesia to Produce Synthetic Fuel From Coal

Indonesia to produce synthetic fuel from coal

JAKARTA — The Indonesian government plans to run a project to produce synthetic fuel using its abundant coal stocks as part of the energy diversification program, an official said Tuesday.

The government will appeal for technological support from Japan to convert coal to liquid fuel, said Nenny Sri Utami, head of the research and development center with the Ministry of Energy and Mineral resources.

Coal-based fuel is targeted to contribute at least 2 percent to national energy supplies by 2025.

"We will produce synthetic coal-based fuel with similar quality with that of oil fuel," she said at a seminar in her office here.

Indonesian and Japanese firms will establish a consortium and set up factories in coal-rich provinces, such as South Sumatra, East and South Kalimantan, with initial investment of 1.3 billion U.S. dollars in 2009, she said.

The factories are expected to begin production in 2013 with a combined output targeted at 13,500 barrels per day.

Last September, Indonesian and Japanese firms agreed to jointly build a factory to produce upgraded brown coal (UBC) in South Kalimantan province with and investment of 68 million U.S. dollars.

The project involves Japan Coal Energy as a ready buyer, Kobe Steel as contractor, Indonesia’s PT Arutmin as coal supplier, state- run oil firm PT Pertamina and the Energy and Mineral Resources Ministry’s research and development center.

The plant aims to upgrade brown coal into high-rank coal that can be used for power generation, with initial production target of 1,000 tons of upgraded coal per day.

Indonesia’s coal reserves are estimated at 36 billion tons and production is projected to reach 212 million tons this year, increasing by 19 million tons from 2006.

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