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LG to build $13bn methanol plant in Indonesia
11
Aug '14
LG International will build and operate a chemical complex in the Bintuni industrial area in West Papua in Indonesia at a cost of US $13 billion, the Jakarta Post reported.

The chemical plant will have an annual production capacity to produce one million tons of Methanol, a senior executive of LG International, Jee Hoon-Kang said.

However, he said, LG would need a guarantee from the government to get enough supply of gas before starting the project, Kang told reporters.

“LG would need one year of study to decide on the appropriate licensing and locate natural gas supply, before it starts construction of the complex, which will take around three years”, Kang said.

LG is currently awaiting approval from the Forestry Ministry for conversion of 2,300 hectares of conservation land for the Bintuni complex.

During a meeting between representatives of LG and Indonesian Minister of Industry, Kang was informed about a plan to designate the 200 hectare site as a shared facility for companies operating within Bintuni.

Manufacturing Director in the Ministry of Industry, Harjanto, said the shared facility would be shared by LG, German petrochemical company Ferrostaal Industrial Projects and state-owned fertilizer company PT Pupuk Indonesia in order to cut infrastructure costs.

Harjanto said, “Building infrastructure is costly, so this as an opportunity for integration and optimization of investments among the investing companies”.

One among the shared facilities is setting up of a power plant, electricity from which will be shared amongst all companies in the Bintuni complex.

“If everyone builds their own power plants, it would take up all the land. If one power plant is shared among companies, it will be more efficient. The idea is to integrate the petrochemical and fertilizer industries so their byproducts can also be shared among them”, Harjanto added.

Responding to questions regarding Bintuni’s projected time frame, Harjanto said that it depended on the availability of gas.

LG would need 91 million standard cubic feet per day (MMSCFD) of natural gas, which would bring the total gas consumption of Bintuni up to approximately 202 MMSCFD. There are about 48 trillion cubic feet of gas reserves that have already been identified in the area.

The Industry Ministry would sign a MoU with LG that would clarify the terms of their partnership, including those related to gas allocation.

The integrated petrochemical complex in Bintuni would produce urea and ammonia-based fertilizers and a wide array of petrochemical products, including methanol, polypropylene and polyethylene.

Fibre2fashion News Desk - India

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