Air Products is Set to Invest $2bn to Build a Coal-to-methanol Production Facility in Indonesia

The company has signed a long-term on-site contract to build, own and operate the air separation, gasification, syngas clean-up, utilities and methanol production assets.

Under the contract, PT Bakrie Capital Indonesia and PT Ithaca Resources will supply the coal feedstock. The two companies also agreed to offtake the methanol for sale within the domestic market.

Air Products’ chairman, president and CEO Seifi Ghasemi 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.”

The Indonesian facility is expected to produce nearly two million tonnes per year (TPY) of methanol using around six million TPY of coal.

The facility is expected to commence production in 2024.

PT Bakrie Capital Indonesia CEO Adika Nuraga Bakrie and PT Ithaca Resources president director Agoes Projosasmito said: “We’re 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.”

Air Products is headquartered in the US and focuses on selling gases and chemicals for industrial uses.

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