Indonesia Has LPG Replacement Project, Here's the Latest Update
Indonesia’s mining industry holding MIND ID has disclosed the latest progress on the coal-to-dimethyl ether (DME) downstreaming project as an alternative to liquefied petroleum gas (LPG). This strategic initiative is expected to reduce Indonesia’s high dependence on LPG imports.
MIND ID’s President Director Maroef Sjamsoeddin stated that the development of the coal-to-DME project is part of efforts to strengthen national energy resilience. The project is being executed by PT Bukit Asam Tbk, utilising low-calorie coal reserves.
“In this regard, PT Bukit Asam has allocated low-calorie coal reserves as raw material for DME, including the provision of the necessary industrial zones,” he said during a Working Meeting with Commission XII of the House of Representatives on Monday (13/4/2026).
However, Maroef emphasised that the realisation of this project still requires integrated coordination across entities, particularly in formulating the project scheme.
Furthermore, regulatory support and policies are deemed crucial to ensure the DME project operates optimally in the long term and provides added value to the state.
“All downstreaming projects are implemented while adhering to regulations, controlling environmental impacts, and the principle of resource sustainability. MIND ID is committed to ensuring that the national downstreaming agenda not only proceeds but delivers tangible and measurable benefits to the national economy,” he added.
Previously, PTBA’s President Director Arsal Ismail stated that by 2030, the company targets initiating the commercialisation of coal downstreaming to strengthen national energy resilience.
At least, PTBA will focus on three main sectors: coal downstreaming, strengthening coal infrastructure and logistics, and developing power generation businesses based on coal-fired power plants as well as new renewable energy (NRE).
“These three directions of company development represent our commitment to supporting the government’s eight aspirations for national energy independence,” Arsal said during a Working Meeting with Commission VI of the House of Representatives on Tuesday (31/3/2026).
Further, he mentioned that one of the strategic projects being developed is the downstreaming of coal into dimethyl ether (DME). This project aims to reduce Indonesia’s dependence on LPG imports.
In this project, PTBA will process around 6.9 million tonnes of low-calorie coal per year to produce approximately 1 million tonnes of DME. “In this scheme, PTBA will serve as the factory operator as well as the coal supplier, and will collaborate with Pertamina, which will be the off-taker of the DME we produce,” he said.
Besides DME, PTBA is also developing a coal-to-synthetic natural gas (SNG) project as an alternative gas supply, particularly for South Sumatra and West Java regions.
In that project, PTBA will utilise around 9 million tonnes of low-calorie coal per year with a production capacity of up to 240 BBTUD syngas.
Regarding the development scheme, PTBA will form a joint venture with PT Perusahaan Gas Negara Tbk (PGN), which will also be the 100% off-taker of the produced SNG.
“We have already signed a head of agreement between PTBA and PGN for the development of the coal-to-synthetic natural gas project, which will be followed by conducting a joint feasibility study with a consultant,” he said.