Indonesia’s state-owned gas distributor PT PGN is considering entering the petrochemical market with a project to convert natural gas into methanol and dimethyl ether (DME), a local media reported. The diversification plan is aimed to help Indonesia reduce its reliance on imported fossil fuels. PGN and state refiner PT Kilang Pertamina Indonesia (KPI) will conduct a feasibility study on the project which is expected to be completed in 2022-2023.
PGN president director Suko Hartono on Monday said major oil and gas projects in East Java, South Sumatra, and Kalimantan will provide the project with feedstock gas. He added that DME could substitute liquefied petroleum gas (LPG) as cooking gas, while methanol can be used to produce biodiesel.
Indonesia imported 74% of its 7.6 million tons LPG consumption in 2019, data from the Energy and Mineral Resources Ministry showed. Meanwhile, demand for biodiesel is also expected to rise in the coming years driven by the government’s push to increase palm oil content in biodiesel blends and growing commercial transportation.
