Bumi Etam Chemical signs FEED and EPCC contracts for $2.3-B coal-to-methanol project in Indonesia
Indonesia is advancing its coal downstream strategy with a $2.3-B coal-to-methanol project in East Kutai, East Kalimantan, Indonesia, aimed at reducing the country's reliance on imported methanol while adding value to domestic low-calorie coal resources. State strategic project developer PT Bumi Etam Chemical (BEC) has signed the front-end engineering design (FEED) contract and engineering, procurement, construction and commissioning (EPCC) framework agreement, marking the start of engineering work ahead of construction.
BEC, a joint venture between PT Arutmin Indonesia, PT Kaltim Prima Coal (KPC), PT Istana Karang Laut (IKL), and China National Chemical Engineering Co. Ltd. (CNCEC), plans to begin commercial operations in 2030 with an initial production capacity of 2 MMtpy of methanol, with a long-term target of 3.6 MMtpy. The facility, to be built at the Batuta Chemical Industrial Park, will also produce sulfuric acid as a byproduct.
The project supports Indonesia's goal of reducing methanol imports, which supplied 68% of domestic demand in 2025, when imports reached 1.3 million tons and cost the country approximately $400 MM. Demand is expected to increase further as Indonesia expands its B50 biodiesel mandate, with methanol serving as a key feedstock.
Government officials said the project will strengthen resource sovereignty, create thousands of jobs, promote technology transfer, and enhance national technological capabilities. BEC has already secured preliminary agreements with prospective domestic buyers, while any production exceeding local demand will be exported.
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