The Investment Acceleration Task Force Visits KPC to Ensure Coal Gasification Projects Run

Minister of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia, as Chair of the Investment Acceleration Task Force, visited the project site for the gasification of coal into methanol located in Bengalon District, East Kutai Regency, East Kalimantan, Wednesday (19/01).

Members of the Investment Acceleration Task Force were also present, including Deputy Attorney General Sunarta as Deputy Chair of the Investment Acceleration Task Force, Ridwan Jamaludin, Director General of Mineral and Coal of the Ministry of Energy and Mineral Resources (ESDM), and Brigadier General Pipit Rismanto, Director of Specific Crimes (Dirtipidter) of the National Police Criminal Investigation Agency.

Minister Bahlil and his entourage were welcomed by KPC’s Acting CEO Ido Hutabarat, Chief Operating Officer (COO) Muhammad Rudy, Commissioner of PT Batuta Chemical Industrial Park (BCIP) Rio Supin, and Deputy Regent of East Kutai Kasmidi Bulang.

KPC will supply coal for the gasification facility as the owner of the coal mining area in Bengalon District. Furthermore, PT Air Products East Kalimantan (PT APEK), a joint venture between Air Products, PT Bakrie Capital Indonesia, and PT Ithaca Resources, will process coal into methanol.

PT APEK is involved in the industrial gasification of coal into methanol, with a Rp 33 trillion investment plan and a production capacity target of 1.8 million tons of methanol per year. This project is set to go commercial in the fourth quarter of 2024.

Bahlil Lahadalia, Minister of Investment/Head of BKPM, stated that the direct inspection of the project site was to ensure that the company had completed downstream as a condition for extending the KPC contract. In addition, a review of the mining area was conducted to ensure environmental balance and how investment is progressing in the East Kutai area of East Kalimantan.

“Downstreaming must be carried out immediately because this is a direct order from the President. Every PKP2B (Coal Mining Concession Work Agreement) that will be extended must provide a portion of the allocation for Indonesia’s development,” said Bahlil.

Bahlil also added that Indonesia was gradually stopping exports of raw materials, in line with efforts to increase the added value of domestic resources. It is time for the government to be disciplined, so that Indonesia can be the party that imports the downstream products.

“We have to ensure domestic needs first. If the coal that we used to import as raw materials, even though there was not enough domestic electricity, now is the time to care about local needs,” explained Bahlil.

Deputy Attorney General Sunarta said he would fully oversee the investment from a legal perspective. It is not uncommon for fraud to occur in the course of investment. As a public policy maker, every investment activity will always be faced with risks, so the Investment Acceleration Task Force ensures that it will provide a definite escort for the course of existing investments.

“We have been here since the beginning to know the steps that KPC is facing to feel safe in carrying out its investment activities. Our vision is how to help in economic growth, then evaluate the community and the country,” explained Sunarta.

Brigadier General Pipit Rismanto, Dirtipidter Bareskrim Polri, added that downstreaming is a legal mandate that must be followed, and that increasing added value is required for investment in Indonesia. The government is here to make things easier for investors while also keeping the goal of economic equality in Indonesia in mind.

The coal-to-methanol gasification project in Bengalon has been designated as a National Strategic Project in accordance with Presidential Regulation Number 109 of 2016 on the Acceleration of National Strategic Project Implementation (PSN). With this project, Indonesia’s gas imports are expected to be reduced by USD 7.6 billion during the production period, while foreign exchange earnings are expected to increase to USD 4.7 billion during the construction and production periods.