Developing a Bio-Methanol Ecosystem from Upstream to Downstream for Domestic and Global Markets
Pertamina New & Renewable Energy (Pertamina NRE), Pertamina’s subholding in the new and renewable energy sector, signed three strategic agreements on Friday (14/8) to build an end-to-end bio-methanol value chain based on biogas in Indonesia. The three agreements comprise a Joint Development Agreement (JDA) with Singaporean technology company CRecTech Pte. Ltd., a Heads of Agreement (HoA) with PT Pertamina Petrochemical Trading (Pertachem), and a Memorandum of Understanding (MoU) with Pertamina International Marketing & Distribution Pte. Ltd. (PIMD).
Through the JDA with CRecTech, Pertamina NRE will develop a biogas-to-bio-methanol pilot facility in the Sei Mangkei Special Economic Zone (KEK), North Sumatra. The facility, with a capacity of approximately 50 tonnes of bio-methanol per year, will utilise biogas derived from Palm Oil Mill Effluent (POME) at Pertamina NRE’s Sei Mangkei biogas power plant.
CRecTech’s CRecREF catalyst technology enables the conversion of biogas into methanol through two stages, compared with the conventional process which requires four stages, with the potential to reduce production costs by up to 50%. The development of this pilot facility will serve as the basis for developing projects on a commercial scale.
In terms of commercialisation, Pertamina NRE signed an HoA with Pertachem to open a pathway for bio-methanol uptake in the domestic market, including through discussions on a framework towards a long-term offtake scheme in the commercial phase. This step is relevant amid national methanol demand approaching two million tonnes per year, with around two-thirds still met through imports.
Meanwhile, through the MoU with PIMD, Pertamina NRE is exploring opportunities for the supply and marketing of bio-methanol as marine fuel (bunkering) in the international market. The initiative is in line with the global maritime sector’s decarbonisation drive, which encourages the use of low-carbon fuels. This initiative also opens opportunities for Indonesia to contribute to the provision of low-carbon maritime fuels in the global market.
Pertamina NRE Chief Executive Officer John Anis said the three agreements represent concrete steps by Pertamina NRE in building a bio-methanol value chain, from production to domestic and international markets. This development also transforms palm oil industry waste into value-added energy products while supporting energy security and Indonesia’s Net Zero Emission 2060 target.
“Today’s signing is not merely a ceremony, but concrete proof that we are building a complete value chain, from production with CRecTech, domestic offtake with Pertachem, to opening a pathway to the international marine fuel market with PIMD,” said John, quoted from a press release received on Wednesday (19/8).
Meanwhile, CRecTech CEO Dr Kang Hui Lim added that the development of bio-methanol requires collaboration across various capabilities, from technology, infrastructure and production to market access.
“We see strong value in this collaboration. Pertamina brings knowledge of Indonesia, energy infrastructure, customers and markets, while CRecTech brings technology and experience. Together, we can connect technology, production, commercialisation and market needs, which will be key to further development,” said Kang.
President Director of PT Pertamina Petrochemical Trading Aribawa said the development of bio-methanol has the potential to open a new business foundation that can grow in the future.
“Methanol has been part of Pertachem’s trading portfolio. With CRecTech’s technology and Pertamina NRE’s renewable energy resources and capabilities, we hope to develop bio-methanol that supports Indonesia’s energy transition agenda. For Pertachem, this agreement is a concrete step to build a new business foundation that can continue to grow,” he explained.
The development of biogas-based bio-methanol is part of Pertamina NRE’s efforts to promote downstream resource development and low-carbon energy development. By utilising POME as a biogas source, this initiative has the potential to capture methane emissions that were previously released into the atmosphere, while transforming palm oil industry waste into value-added energy products. In addition to supporting energy diversification and strengthening national energy security, this development also opens opportunities for the utilisation of bio-methanol for domestic needs and international markets, as well as strengthening Pertamina NRE’s role in developing new and renewable energy solutions towards the Net Zero Emission 2060 target.