Air Products will invest $2bn to build a coal-to-methanol production facility in Indonesia.

Under a long-term on-site contract with PT. Bakrie Capital Indonesia and PT. Ithaca Resources, the US industrial gas giant will build, own and operate the air separation, gasification, syngas clean-up, utilities and methanol production assets to produce methanol for Bakrie and Ithaca.

Located in Bengalon, East Kalimantan, this facility – including Air Products’ proprietary Syngas Solutions™ dry-feed gasifier – will enable nearly two million tons per year (TPY) of methanol to be produced from nearly six million TPY of coal. The project is expected onstream in 2024.

Bakrie and Ithaca will supply the coal feedstock and have committed to offtake the methanol production for sale within Indonesia.

Seifi Ghasemi, Air Products’ Chairman, President and CEO, 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.”

Adika Nuraga Bakrie, PT. Bakrie Capital Indonesia’s CEO, together with Agoes Projosasmito, PT. Ithaca Resources’ President Director, said, “In line with President Joko Widodo and the Government of Indonesia’s plan, there is strong momentum for this project, which will produce high value methanol from abundant, low-value coal reserves.”

“Furthermore, we are very encouraged by the Government’s support for developing cutting edge technology and products in the Eastern Region, which will contribute to the overall sustainable economic development of Indonesia.”