Jokowi Has Inaugurated, Ready to Use LPG Substitutes

            President Joko Widodo on (24/01/2022), inaugurated the groundbreaking procession for the coal gasification project to become Dimethyl Ether (DME) in the Tanjung Enim Industrial Estate, Muara Enim Regency, South Sumatera. The President said the DME project is very important because it can act as a substitute for Liquefied Petroleum Gas (LPG), so that it can reduce LPG imports which so far have reached 6-7 million tons per year or around 80% of domestic LPG needs.

            “I have said many times about downstream, industrialization. The importance of reducing imports. I ordered this six years ago but thank God, today even though in the long term it has not been able to start, thank God we can start today, groundbreaking the coal downstream project has become DME,” he said.

            Jokowi said that so far, Indonesia’s LPG imports were huge, around Rp80 trillion from the Rp100 trillion needed. On the other hand, the government still provides subsidies of around Rp60-70 trillion per year. “My question is, do we want to continue to do this? Continue to import? The profit is in other countries, which also create job opportunities in other countries, even though we have the raw material, namely coal which is converted into DME,” he said.

            The DME project whose groundbreaking ceremony was inaugurated is a project worth Rp33 trillion which was jointly carried out by PT Bukit Asam Tbk (PTBA), PT Pertamina (Persero), and Air Products & Chemicals Inc (APCI), a petrochemical company from the United States. The investment for the construction of this project is entirely carried out by Air Products, while PTBA will play a role in supplying coal, and Pertamina as the buyer of DME products later.

            The DME project in Tanjung Enim is planned to operate for 20 years. With the utilization of 6 million tons of coal per year, this project can generate 1.4 million DME per year to reduce LPG imports by 1 million tons per year, to improve the trade balance. This DME project can already be operational and will begin to be distributed as early as mid-2024.

Jan 24, 2022, CNBC Indonesia