Indonesia is planning to construct a methanol plant in Bojonegoro, East Java. The Minister of Energy and Mineral Resources, Bahlil Lahadalia, announced that the investment value of the plant is estimated at USD 1.2 billion, equivalent to IDR 19 trillion. 

 

Bahlil stated that the plant's development aims to support the government's target of adopting fuel blending using biofuels, particularly palm-based biodiesel, such as B40 by 2025 and B50 by 2026 in Indonesia. 

 

“This initiative cannot be realized without methanol. We need approximately 2 to 2.3 million tons of methanol. This is a form of downstream development in the gas sector,” Bahlil explained during a coordination meeting of the Ministry of Investment, which was monitored virtually via the Ministry of Investment's YouTube broadcast on Thursday, December 12. 

 

Methanol is a crucial component in producing biodiesel, used to blend fuels. Bahlil assured that the gas supply for the methanol plant is secure, with the government preparing 90 million British thermal units (MMBTU) of gas. 

 

However, Bahlil has not yet provided further details on the source of the gas for the plant. He also mentioned that the construction of this plant had been planned earlier but was delayed due to a lack of coordination between the Ministry of Investment and the Ministry of Energy and Mineral Resources. 

 

“We must work together to achieve national energy sovereignty,” he said. 

 

Plans for Other Methanol Plants 

 

PT Pupuk Indonesia had previously announced plans to build two methanol plants in two provinces by 2030. The company's President Director, Rahmad Pribadi, said the development of methanol plants aims to support the government in accelerating the B50 program. 

 

According to Rahmad, blending fossil fuels with biofuels, particularly palm oil-based fuel, to produce B50 requires methanol, which is still heavily reliant on imports. 

 

“Pupuk Indonesia will develop a methanol industry to reduce methanol import volumes and support B40 or B35,” Rahmad said during the AZEC 2024 event on Wednesday (August 21). 

 

Rahmad also revealed that the two plants, planned for East Kalimantan and Nangroe Aceh Darussalam, represent the company’s efforts to assist the government in realizing energy transition goals. “This is Pupuk Indonesia’s support for a clean energy transition. The construction is planned for 2030, as it takes a long time to complete,” he added. 

 

Original article here

This article is published in partnership with Katadata