President Jokowi Leads Groundbreaking Ceremony for Coal Downstream Project into Dimethyl Ether

President Jokowi leads the groundbreaking ceremony for downstreaming of coal project into dimethyl ether (DME), in Muara Enim, South Sumatra, Monday (01/24). (Source: Screenshot)

President Joko “Jokowi” Widodo Monday (01/24) led the groundbreaking ceremony for downstreaming of coal project into dimethyl ether (DME) in Muara Enim regency, South Sumatra province.

“It has been six years since I made the order. Even though it takes long-term processing, alhamdulillah, we can start the groundbreaking for downstreaming of coal project into DME,” the President said.

In his remarks, the Head of State reiterated the importance of industrial downstreaming that can provide added value and curb imports.

President Jokowi revealed that the current value of liquefied petroleum gas (LPG) imports reached around Rp80 trillion out of Rp100 trillion total demands per year.

The Government also provides Rp60-70 trillion for LPG subsidy so that the communities can use the LPG at a relatively affordable price.

“My question is, do we want to keep doing this? Keep importing? We just help other countries make profits, create more job opportunities, even though we have the raw materials, namely coal which is converted into DME,” he said.

The President went on to say that if the downstreaming of coal into DME begins the production, it will reduce subsidies from the State Budget by around Rp7 trillion.

For the record, the project is a collaborative project between state-owned coal miner PT Bukit Asam (PTBA), state-owned energy company PT Pertamina, and United States-based chemical firm Air Products and Chemicals.

“If the use of LPG will be stopped and move to DME, the huge amount of Rp60-70 trillion will be able to reduce the subsidy sourced by the State Budget. This is what we continue to pursue,” he added.

If we can continue to reduce imports, the President said, the downstream industry will simultaneously improve the trade balance and the current account balance, and also create job opportunities.

“We have been comfortable with imports for decades. Some are comfortable with imports. Indeed, it is comfortable to sit in the comfort zone, keep repeating the import routine without even thinking that it brings disadvantages for the country and the people because there are no job opportunities,” he said.

Based on a report from Minister of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia, the downstream project will create employment for around 12-13 thousand people from the construction carried out by Air Products and Chemicals and around 11-12 thousand for the downstream carried out by PT Pertamina.

“If there are five investments like the one in front of us, it means 70 thousand jobs will be created. That is for direct investment, while indirect investment can create two or three folds as much. This is why I continue to follow. I continue to pursue,” he stated.

On that occasion, the President also pointed out that he urged all relevant ranks to complete the project in accordance with the set target, that is, less than three years.

“Before I get here, I have gathered everything related to this matter in order to ensure that it will be completed within 30 months, as conveyed by Air Products and Minister of Investment. Do not miss the target by too far,” he said.

The Head of State further said that the downstream project will also be carried out in other areas, considering that Indonesia has sufficient coal deposits.

“We hope after we finish the project here, we will start again elsewhere. This project can only cover South Sumatra and its surrounding areas, approximately six million families,” the President remarked. (TGH/UN) (RIF/MUR)