US-based Celanese Corporation has inked a Memorandum of Understanding (MOU) with Indonesian energy company Pertamina to form a synthetic fuel ethanol joint venture.

As per the agreed terms, Celanese will have a majority stake in the venture, which will employ its proprietary TCX ethanol process technology for the development of synthetic fuel ethanol projects.

The transfer of the TCX technology will be made as part of a separate licensing agreement.

Commenting on the project Pertamina president and CEO Karen Agustiawan said that the development of ethanol business is in line with the Indonesian government’s policy to implement Indonesian target in Energy Mix 2025.

"This initiative has triggered us, the National Energy Company of Indonesia, to develop clean, renewable energy and new energy for diversification, by increasing the contribution from gas and other non-fossil energy contribution, as well as liquefaction coal which is targeted to contribute about 2 percent by 2025.

"To meet this goal, we are pleased to partner with Celanese on the development and application of new forms of energy, such as synthetic fuel ethanol," added Agustiawan.

The venture will also be responsible for selecting the first production location, initiating the project permitting, and negotiate coal supply and other industrial partner agreements in its project planning phase

This phase is expected to be completed by the end of 2013.

Production of fuel grade ethanol is expected to begin approximately 30 months after final investment decisions by each company and receiving all necessary government approvals.