Air Products invests US$2bn in world-scale coal-to-methanol facility

AIR Products is to invest US$2bn as part of a long-term agreement for a world-scale coal-to-methanol facility in Bengalon, East Kalimantan, Indonesia. The facility will produce nearly 2m t/y of methanol from almost 6m t/y of coal.

Methanol can be used as a fuel, and it is a promising energy carrier. Additionally, it serves as a precursor to other chemicals, including formaldehyde which is used in many areas, especially in polymer production.

Air Products’ investment will be used to build, own, and operate air separation, gasification, syngas cleanup, utilities, and methanol production assets.

Under the agreement, Bakrie Capital Investment and mining company Ithaca Resources will supply the facility with coal feedstock and have committed to offtake the methanol produced to sell within Indonesia. Bakrie Capital Investment is part of the Bakrie Group, an Indonesian conglomerate which operates coal mining facilities through mining company Bumi Resources.

The project is expected to come onstream in 2024.

According to Air Products CEO Seifi Chasemi, the project will help Indonesia, Southeast Asia’s largest economy, to achieve its commitments of reducing energy imports and efficiently converting abundant coal resources into high-value products.