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Following its establishment in May, a consortium made up of
coal mining firms will soon begin a feasibility study on plans to build
the country's first coal liquefaction plant.
Bukin Daulay, the director of the Energy and Mineral Resources
Ministry's Mineral and Coal Technology Research and Development Center,
said Friday that the feasibility study on the project would begin in
August and would take six months to complete.
"JBIC (Japan Bank for International Cooperation) will finance the
feasibility study by providing a grant of US$500,000," Bukin said
following a meeting between the consortium and government officials.
He said that the consortium had agreed during the meeting to build the
US$1.3 billion plant in coal-mining firm Arutmin's mining concession in
Satui, South Kalimantan.
Based on the results of a pre-feasibility study by Japanese research
firms in 2002, Satui was the most suitable site for the project, Bukin
said.
He also said that Arutmin might supply 2.5 million tons to the plant,
which would convert coal into liquid fuels like gasoline and diesel,
and have an initial capacity of 13,500 barrels per day.
The other members of the consortium would likely contribute to the
project in the form of equity. However, precise figures had yet to be
discussed, Bukin said.
The price of the plants output would be highly competitive, at an
average price of $35 per barrel, compared to crude oil, whose price is
expected to reach $100 per barrel in the next few years, said Eiichiro
Makino, a coal industry consultant advising the ministry.
The plant is expected to come onstream in 2013.
Coal liquefaction is one of the alternative sources of energy that will
be promoted by the government as part of its efforts to decrease the
country's dependency on oil.
Under the government's latest energy policy, coal liquefaction should
account for 2 percent of the total national energy mix by 2025.
The government hopes that the capacity of the South Kalimantan plant
can be raised to 27,000 barrels per day by 2017 at a cost of $2.1
billion.
In order to meet the 2 percent target, Indonesia will need the develop
coal liquefaction plants with a combined output of 189,000 barrels per
day by 2025.
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