JAKARTA, 26 February 2020 | Plans and a timeline for the large-scale commercial production of DME have been outlined by the Indonesian Ministry of Energy and Mineral Resources and state-owned energy company Pertamina. Indonesia has long been exploring the potential to blend domestically-produced DME with LPG for domestic and commercial use in an effort to reduce dependence on imported LPG, and following recent studies and a demonstration project the Indonesian government this month announced plans to intensify efforts to develop coal-to-DME production.
Pertamina, major coal mining partner PT Bukit Asam and Air Products and Chemicals have moved forward this year with their project to convert abundant low-calorie coal, via gasification, into a slate of high-value products including large volumes of DME for blending with LPG. Last year the three companies announced a joint venture company to cooperate on development of a major coal gasification project producing DME and synthetic natural gas (SNG) for domestic consumption. The agreement followed on the recent completion of a major project by Pertamina, comprising a feasibility study, implementation roadmap, and market demonstration of DME for domestic and commercial use done in and around Jakarta, exploring the implementation of DME's use as a cooking fuel in the country,
Indonesia is the 4th largest LPG importer in Asia (after China, Japan and India), and rapidly increasing consumption of LPG combined with subsidies for the product and diminishing production has moved the government in Southeast Asia’s largest economy to encourage investment in technology enabling the conversion of abundant quantities of domestic low-grade coal to methanol and DME in an effort to reduce LPG imports. More than a decade after the launch of the government’s kerosene-to-LPG conversion program (that encouraged a switch from kerosene to LPG through fuel subsidies, the provision of free “starter packages” to consumers and investment in infrastructure and equipment), consumption of LPG has increased from 1 million metric tons per year (MTPA) to nearly 7 million MTPA. During the same period, domestic production of LPG has continued to drop, partly due to a lack of new reserve discoveries.