US-based Celanese Corporation has signed an agreement with Indonesian state-owned energy company Pertamina for the development of fuel ethanol projects.

As per the agreed terms, the two companies will jointly develop synthetic fuel ethanol projects in Indonesia using Celanese’s proprietary TCX ethanol process technology.

The projects support Pertamina’s long-term strategy to develop new and domestic energy capabilities.

Celanese would hold the majority shareholding in the joint venture and would license its TCX Technology as part of a separate technology licensing agreement.

Commenting on the venture Pertamina president, director and CEO Karen Agustiawan said, "The development of ethanol business is in line with the Government of the Republic of Indonesia’s policy to implement Indonesian target in Energy Mix 2025."

The companies will together identify potential production locations; confirm coal supply options and develop an ethanol distribution strategy.

Planning phase of the project is expected to be completed by December 2013 and includes the selection of the first production location as well as initiation of project permitting and negotiation of coal supply and industrial partnership agreements.

Production of fuel grade ethanol is projected to commence 30 months after determining investment options and receipt of necessary government approvals.