ASEAN KEY DESTINATIONS
Coal gasification plants rise in Indonesia
To meet growing demand for gas in the country, state coal miner Bukit Asam (PTBA) plans to build two coal gasification plants and explore coal beds for methane, a top company executive said.
PTBA president director Sukrisno said the company was diversifying its business to make better use of low-calorie coal.
"The trend for the next couple of years is gas. As more and more households convert from kerosene to gas, the opportunity is huge," he said on Wednesday.
Sukrisno said the firm had started conducting feasibility studies to build coal gasification plants in Pekanbaru and Tanjung Enim, both in Sumatra. He did not give a possible price tag for the project.
"We have already signed a memorandum of understanding with state fertilizer company Pupuk Sriwijaya for the purchase of the gas. We will supply the gasification plant in Pekanbaru with six million tons of coal annually for the next 30 years," he said.
The Pekanbaru plant is expected to begin operating in 2013 or 2014, he said. The Tanjung Enim plant has a smaller capacity that could increase depending on the feasibility study.
Herry Setyawan, an analyst from Indosukses Futures, said PTBA's move would boost its financial performance in the long run.
"It's a positive strategy to diversify the company's business, but it will take a few years before they settle in the gas sector,'' Herry said.
He also said PTBA was moving in the right direction by optimizing its low-calorie coal use.
"Diversification is necessary. Looking ahead, there's a lot of potential for gas use, especially if PTBA doesn't normally use its low-calorie coal," he said.
The mining company has not sold low-calorie coal in the past. Low-calorie coal produces less energy when burned than other varieties of coal.
PTBA spokesman Achmad Sudarto said coal reserves in Pekanbaru were around 400 million tons.
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