Minister Bahlil Targets DME Project to Start in 2026, Partners with China or Europe
Sat 25 Oct 2025, 05:36 AM
Share
The Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, is targeting the start of construction in 2026 for the coal downstreaming project to produce Dimethyl Ether (DME) as a substitute for Liquefied Petroleum Gas (LPG).
This project is among 18 strategic downstreaming initiatives currently being finalized by the Task Force for Accelerating Downstreaming and National Energy Security.
Bahlil said the DME project is one of the government’s priorities to reduce dependence on LPG imports.
“Our LPG consumption is 8.5 million tons, while domestic production capacity is only 1.3 million tons. So we import around 6.5–7 million tons. The way to reduce imports is by creating import substitutes through coal downstreaming,” Bahlil said on Friday evening (October 24, 2025).
He explained that all concepts and pre-feasibility studies (pre-FS) for the 18 downstreaming projects have been completed by the Downstreaming Task Force.
The results of these studies are currently being finalized by a consultant appointed by Danantara.
“Next year the target is to begin construction. The partner will be Danantara. The technology could come from China or Europe, depending on which is most efficient,” Bahlil added.
According to Kontan’s records, one of the companies involved in the DME project is PT Bukit Asam Tbk (PTBA).
PTBA’s Director of Downstreaming and Product Diversification, Turino Yulianto, said the company has earmarked around 800 million tons of coal specifically for downstreaming programs.
“PTBA is fully committed to downstreaming. We’ve locked in 800 million tons of coal specifically for downstreaming. So it won’t be used for anything else,” Turino said after the HIPMI–Danantara Indonesia Business Forum in Jakarta, Monday (October 20).
Turino added that of PTBA’s total coal reserves of 2.9 billion tons, around 5–6 million tons per year will be allocated to the DME project.
“It’s not only for DME; there are various uses. DME itself only needs 5–6 million tons per year,” he explained.
From an economic standpoint, PTBA has conducted internal calculations and is now discussing the business scheme with Danantara.
Turino emphasized that the DME project must deliver dual benefits, supporting national energy security while also being commercially profitable for the mining issuer.
Based on Kontan’s data, the DME project is one of six coal downstreaming projects under the coordination of the Downstreaming Task Force.
One of the main projects is located in Muara Enim, South Sumatra, under PTBA’s responsibility.
In addition to Muara Enim, the DME project is also planned to be developed in five other locations: Bulungan (North Kalimantan), East Kutai (East Kalimantan), Kota Baru (South Kalimantan), Pali (South Sumatra), and Banyuasin (South Sumatra).
Advertisement
