PT Bukit Asam (PTBA), one of Indonesia's largest state-owned coal producers, and PT Perusahaan Gas Negara (PT PGN), a government-controlled gas firm, will jointly establish a coal gasification project to produce clean energy, an official announced on Monday.
The project will convert coal into synthetic natural gas to reduce carbon emissions.
Rosa Permata Sari, director of strategy and business development at PT PGN, said that the project will utilize PTBA's low-rank coal reserves in Tanjung Enim, South Sumatra, which have not been fully monetized.
"The reserves are located near PT PGN's pipeline network, making infrastructure development more efficient," she said in a press release, adding that the initiative aligns with the government's priority to strengthen downstream industries.
Regarding product distribution, Rosa noted that the synthetic natural gas is expected to be supplied to industries in western Java, where there are supply shortages.
This year, the two companies will focus on feasibility studies to assess the potential for constructing synthetic natural gas production facilities, pipelines, and viable business models.
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