It spends our foreign exchange since we have to also provide a subsidy of around Rp13 trillion for every one million ton of LPG...Jakarta (ANTARA) - Investment Minister Bahlil Lahadalia has said that investment in the domestic downstreaming industry to process coal into dimethyl ether (DME) can help reduce Indonesia’s liquefied petroleum gas (LPG) imports.
He made the statement while accompanying President Joko Widodo (Jokowi) to witness the inking of a memorandum of understanding (MoU) on investment in Washington D.C., the United States, on Thursday, Eastern Daylight Time (EDT).
Under the agreement, American company Air Products & Chemicals Inc. will invest US$15 billion (approximately Rp219.5 trillion) in the gasification of coal and its derivatives in Indonesia.
"It is one of the President's attempts to develop the domestic downstreaming industry, thus the products can become substitutes for imported items,” the minister said in a press statement broadcast on the Presidential Secretariat's YouTube channel on Friday.
The government is targeting to replace 50 percent of imported LPG with domestically produced DME, he informed.
Indonesia imports seven to eight million tons of LPG worth about Rp80 trillion each year.
"It spends our foreign exchange since we have to also provide subsidy of around Rp13 trillion for every one million ton of LPG, thus the total of the subsidy is around Rp80 trillion to Rp90 trillion per year," Lahadalia noted.
Hence, the President has asked the ministry to cooperate with the American enterprise to develop the domestic DME downstreaming industry.
In addition, Air Products & Chemicals Inc. will provide an additional investment of US$3 billion for the development of new and renewable energy using water resources.
The ministry informed that the company will establish hydroelectric power stations on dams built by the Public Works and Public Housing (PUPR) Ministry.
Earlier, on November 4, 2021, Air Products & Chemicals Inc., had also signed an MoU for four projects with a number of state-run enterprises and national companies: PT Indira Energy Tbk, PT Butonas Petrochemical Indonesia, PT Batulicin Enam Sembilan, and PT Bukit Asam.
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