Danantara backs domestic energy transition to cut LPG reliance

Jakarta (ANTARA) - The Danantara Investment Management Agency will provide funding for the dimethyl ether (DME) project aimed at decreasing LPG imports, Deputy Minister of Investment and Downstream Todotua Pasaribu stated.

"Through Danantara, the government has the idea to process coal to become a DME product, which can be a substitute product for LPG,” he remarked at the Mining Forum in Jakarta on Tuesday (March 18).

Pasaribu noted that Indonesia imports significant quantities of LPG annually.

According to data from the Ministry of Energy and Mineral Resources, Indonesia imports 7 to 8 million tons of LPG each year, underscoring its high dependence on these imports.

On one hand, Indonesia possesses coal reserves that can be converted into DME as a replacement for LPG.

"If we can carry out this (DME) project, we can eventually reduce LPG imports,” Pasaribu stated.

The plan to develop a DME project in Indonesia is still hampered due to the withdrawal of foreign investors, such as Air Products from the US and another Chinese investor, from the cooperation.

However, the government now ensures that the project will run without relying on foreign capital.

DME is an alternative fuel based on low-calorie coal, which is designed to replace imported LPG.

The DME project will be developed at several locations, including South Sumatra, East Kalimantan, and South Kalimantan.

Energy and Mineral Resources Minister Bahlil Lahadalia stated that the DME downstream project in Indonesia will no longer depend on foreign investors.

He stated that the Indonesian government will finance this project using domestic resources, including funds from the State Budget and private national investments.

Based on data from the Ministry of Energy and Mineral Resources, investment for the DME project is estimated to reach US$11 billion. The funds will be utilized to build infrastructure for processing coal into DME.