Bumi Resources' Coal-to-Methanol Project Enters FEED Stage

Jakarta, CNBC Indonesia - The coal-to-methanol downstream project developed by subsidiaries of PT Bumi Resources Tbk (BUMI), namely PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia, has entered a new phase. Through the joint venture PT Bumi Etam Chemical (BEC), the National Strategic Project (PSN) for coal gasification or Coal to Methanol has officially entered the Front-End Engineering Design (FEED) stage and the preparation of the Engineering, Procurement, Construction, and Commissioning (EPCC) Framework Agreement. The FEED and EPCC Framework Agreement contract was signed by BEC together with PT Istana Karang Laut (IKL) and China National Chemical Engineering Co., Ltd. (CNCEC) at The Ritz-Carlton Jakarta, Mega Kuningan, on Wednesday (29/7/2026). This agreement marks a significant milestone in the development of the national coal downstream project, as it signifies the start of the basic engineering phase and the preparation of the EPCC implementation framework, laying the foundation for the construction phase of the coal-based methanol production facility in Kutai Timur, East Kalimantan. BEC President Director Rio Supin stated that the signing of the FEED and EPCC Framework Agreement is a crucial milestone in the long journey of the downstream project, which has been pioneered for more than two decades. He explained that until 2023, KPC and Arutmin had been developing separate downstream plans, with KPC preparing a project in East Kalimantan and Arutmin developing a similar plan in South Kalimantan. However, the two entities eventually decided to collaborate and synergise by forming PT Bumi Etam Chemical to run the downstream project in Indonesia. Currently, 50% of BEC’s shares are owned by PT Arutmin Indonesia and 50% by PT Kaltim Prima Coal. PT Arutmin Indonesia Chief Executive Officer Ido Hotna Hutabarat said the BEC Coal to Methanol project is not merely an investment project but a transformation of coal utilisation towards creating added value through domestic technology and industrialisation. He noted that for years, coal has contributed significantly to Indonesia’s development through state revenue, energy security, regional development, and job creation. However, he emphasised that future challenges require more advanced steps, where the strategic value of natural resources is determined not only by the ability to mine and supply but also by the capacity to process, integrate, and create value-added industrial products. KPC President Director and Chief Executive Officer Muhammad Rudy added that the project is part of the company’s commitment to supporting the extension of its Special Mining Business Permit (IUPK) and represents a real contribution to the transformation of the national mining industry towards greater value addition. He expressed high appreciation to the Government of Indonesia for its direction, support, and strong commitment to promoting the national downstream and industrialisation programme. The development of the Coal to Methanol facility by BEC is part of the value-added obligation for coal by Arutmin and KPC, while also supporting the national downstream policy through the conversion of coal into methanol, a strategic raw material for the petrochemical, manufacturing, and energy industries, as well as various derivative industries. As part of the Bumi Resources business ecosystem, BEC was established by Arutmin and KPC to develop coal-based downstream projects. In its implementation, BEC has partnered with IKL and CNCEC as strategic partners to support the project from the planning stage through to construction and commissioning. This synergy is expected to accelerate the realisation of the Coal to Methanol project while strengthening the national chemical industry supply chain. In addition to supporting the development of coal-based downstream industries, the project is expected to create employment, increase regional economic activity, attract investment, and provide a multiplier effect for society and the national economy.