Mitsubishi Heavy Industries (MHI) Ltd. and Mitsubishi Corp. from Japan are working with the Indonesian government to process low-quality coal in Sumatra, converting them as substitute for natural gas (coal liquefaction). (IFT/DINUL MUBAROK)
JAKARTA (IFT) - Mitsubishi Heavy Industries (MHI) Ltd. and Mitsubishi Corp. from Japan are working with the Indonesian government to process low-quality coal in Sumatra, converting them as substitute for natural gas (coal liquefaction). Both companies said that a joint feasibility study will soon be conducted and completed by March 2012.
The Mainichi Daily News reported last weekend that gas produced from low quality coal in Sumatra will be delivered to Java using pipes. A Substitute Natural Gas (SNG) refinery is scheduled to begin operations in 2017.
In a written statement on the company’s official website, the Mitsubishi Group said that Indonesia has plenty of coal reserves with high moisture and little energy, which is difficult to utilize. On the other hand, Indonesia, with a growing economy, is eager to develop this type of coal as energy sources for production is dwindling.
Satya W. Yudha, Member of Commission VII of the House of Representatives, welcomes coal liquefaction. "Japanese investors must consider domestic needs; not only focus on exports and then not fulfilling the domestic demand for gas," he said.
Kurtubi, a mining analyst, sees that the government's cooperation with Mitsubishi as a positive move because whatever energy source Indonesia owns, it must be developed. Moreover, the country has a high potential of CBM or coal.
Priyo Pribadi Soemarno, a mining analyst, meanwhile, said that Indonesia cannot expect much in the development of coal liquefaction because of the large investment. Investors are not interested in developing the technology because there is no guarantee that the market will take up the production.
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