Indonesian state coal miner Bukit Asam is evaluating a $3.1 billion investment to build a plant that will convert coal into synthetic natural gas, CEO Arsal Ismail told parliament on May 5.
The proposed facility would process 8.4 million metric tons of low-grade coal (3,700 kcal/kg GAR) annually into 240 billion British thermal units per day, or roughly 1.6 million metric tons of synthetic gas per year.
“This project is aimed at meeting Indonesia’s future gas demand, and our low-grade coal reserves are well-suited for this conversion,” Arsal said.
The move marks Bukit Asam’s renewed push into coal gasification, aligning with the government’s drive to add value to domestic resources. It follows the withdrawal of former partner Air Products from a planned coal-to-dimethyl ether (DME) project in 2023.
Bukit Asam now plans to form a joint venture with state-owned gas distributor PGN and a technology provider (not yet disclosed). The companies are currently conducting a feasibility study, assessing production costs and competitiveness with imported liquefied natural gas (LNG).
Preliminary findings suggest synthetic gas could be competitive with LNG, a critical factor as Indonesia—currently a net LNG exporter—could become a net importer by the early 2040s.
Talks are ongoing with several Chinese firms to potentially replace Air Products as a technology and investment partner.