The facility is expected to produce nearly two million tonnes per year of methanol from nearly six million tonnes per year of coal
US-based industrial gases company Air Products has announced an investment of $2bn to build a coal-to-methanol production facility in Bengalon, East Kalimantan, Indonesia.
For the project, the company has signed long-term on-site contract with two Indonesian companies.
Bakrie Capital Indonesia, part of the Bakrie Group, and Ithaca Resources, part of the AP Investment, have agreed to supply the coal feedstock for the project under the long-term on-site contract.
The plant is designed to convert coal to syngas for methanol production from coal.
Kaltim Prima Coal (KPC), one of the two coal mining facilities of Bakrie Group, and Kaltim Nusantara Coal, the coal mining license held by AP Investment, will supply coal to the plant.
The two companies have also committed to offtake the methanol production for sale within Indonesia.
Air Products chairman, president and chief executive officer 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 methanol facility to come online in 2024
To produce methanol for Bakrie and Ithaca, Air Products will invest to build, own and operate the air separation, gasification, syngas clean-up, utilities and methanol production assets.
The facility will feature Air Products proprietary Syngas Solutions dry-feed gasifier.
Expected to come online in 2024, the facility will be able to produce nearly two million tons per year of methanol from nearly six million tons per year of coal.
In April, Air Products completed the acquisition of five operating stream methane reformer (SMR) hydrogen production plants from PBF Energy for $530m.