Bukit Asam to Build Two Coal Gasification Plants
Faisal Maliki Baskoro | February 09, 2011
started conducting feasibility studies to build coal gasification plants in Pekanbaru and Tanjung Enim, both in Sumatra. He did not give a possible price tag for the project.
"We have already signed a memorandum of understanding with state fertilizer company Pupuk Sriwijaya for the purchase of the gas. We will supply the gasification plant in Pekanbaru with six million tons of coal annually for the next 30 years," he said.
The Pekanbaru plant is expected to begin operating in 2013 or 2014, he said. The Tanjung Enim plant has a smaller capacity that could increase depending on the feasibility study.
Herry Setyawan, an analyst from Indosukses Futures, said PTBA's move would boost its financial performance in the long run.
"It's a positive strategy to diversify the company's business, but it will take a few years before they settle in the gas sector,'' Herry said.
He also said PTBA was moving in the right direction by optimizing its low-calorie coal use.
"Diversification is necessary. Looking ahead, there's a lot of potential for gas use, especially if PTBA doesn't normally use its low-calorie coal," he said.
The mining company has not sold low-calorie coal in the past. Low-calorie coal produces less energy when burned than other varieties of coal.
PTBA spokesman Achmad Sudarto said coal reserves in Pekanbaru were around 400 million tons.
"Gasification will provide added value from low-calorie coal. We still don't know how much this will boost our revenue, but one thing for sure is that gas is more expensive than low-calorie coal," he said.
"This will also bridge the gas shortage in the country."
Indonesia's gas supply is almost twice the domestic demand, but private industries have complained of a shortage as most gas production is either exported or allocated to state companies. Total gas demand in Indonesia is 4,861 million metric standard cubic feet per day, while supply was around 9,000 mmscfd last year, according to Energy Ministry data. Upstream oil and gas regulator BPMigas said 1,200 mmscfd was allocated for industry last year, with that amount rising to 1,700 mmscfd this year.
PTBA will join state oil and gas company Pertamina and Arrow Energy, an Australian mining company, in a project to extract 0.8 trillion cubic feet of coalbed methane this year. It also has tenders for multiple power plants in South Sumatra, Riau and Madura.
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