Agency of R & D For Energy and Mineral Resources Ministry of Energy and Mineral Resources

Tokyo, March 27, 2009

Technology Development Policy in Indonesia

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SecretariatGeneral

Secretariat of Agency

LemigasMarine

Geology PPPTKEBTtekMIRA

Ministry of Energy & Mineral Resources

Directorate General Oil and Gas

Directorate General Electricity and Energy

Directorate GeneralMineral, Coal and Geothermal

Agency of Education and Training

Agency of Geology

Agency of Research and Development

Gas , 28.57%

Oil 51.66%

Geothermal, 1.32%

Hydro 3.11%

2006

Coal, 15.34%

2025

Coal, 33%

Gas , 30%

Oil, 20%

Others, 17%

LEGAL ASPECTPresidential Decree No. 5/ 2006Presidential Instruction No. 2/2006

Bio-fuels, 5% Geothermal, 5%Solar, Wind, etc , 5%Coal liquid, 2%

Others

Energy Mix Target in 2025

PAPUA

SULAWESI

JAWA

4.07%

28.37%

1.58%

17.7%

7.58%

40.13%

Resources : 104.8 billion tonsLignite : 60 %

Lignite 58.7%

Bituminous 14.3%

Sub Bituminous26.7%

Anthracite0.3%

Indonesia Coal Resources

KALIMANTAN

Characteristics of LRC

Calorific Value : <4,600 kcal/kgTotal Moisture : 25 – 50%Low Thermal EfficiencyLow Ash Melting TemperatureHigh Tendency for Spontaneous Combustion

Policy of Low Rank Coal Development

Reposition as one of the source of National Energy

Optimizes the utilizations

National Resource ManagementPlay more role in the National Energy MixNew regulation (coal bill)

Added value processingMine mouth power plant Backup for oil & gas supplyMore R&D – Coal Technology CenterIncentive for LRC development

Strategy of Coal utilization

- Affordable- Sustainable- Clean

Low Rank

60%

High Rank

40%

Coal

93.4 Billion Tons

•Mine MouthPower Plant

•Upgrading•Liquefaction•Gasification

ENERGY

2009/4/1 8

1

3

7 56 4

BANDUNGCIREBON

88 10

N

111

112

8

1717PARKING

AREA

Foundry CokeExpansion

Water Pond

Park

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NOTE:1. Biocoal briquette demonstration

plant2. Activated carbon pilot plant3. UBC pilot plant4. Foundry coke pilot plant5. Hybrid coal gasification pilot

plant6. CWM pilot plant7. Cyclone burner pilot plant8. Coal gasification pilot plant9. Operator housing10. Coal liquefaction pilot plant11. Laboratorium12. Administration office

Under constructionFY 2009 planExisting

Master Plan of Coal Centre

List of Activities

1. Upgrading: Upgraded Brown Coal/UBC2. Coal Liquefaction: BCL3. Coal Gasification: TIGAR Gasifier4. Formed coke from low rank coal5. Activated carbon6. Coal water mixture -- Development of

Hot Water Treating Coal Slurry (HWT-cs) Demonstration Plant in Indonesia (counter part : JGC)

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Agency of R & D For Energy and Mineral Resources Ministry of Energy and Mineral Resources

Tokyo, March 27, 200910

DEVELOPMENT OF HOT WATER TREATING COAL SLURRY (HWT-cs)

DEMONSTRATION PLANT IN INDONESIA

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Coal Water Mixture• A mixture of coal with water that is called as coal water

mixture/slurry (CWM/S) is a fluid with a viscosity equivalent to crude or heavy oil offering potential as a replacement for fuel in oil fired facilities with only modest retrofits of existing equipment

• Normally, CWM is prepared by using pulverizing bituminous coal, since the surface nature of bituminous coal is more hydrophobic than lignite. However the LRC could be changed to be a hydrophobic by applying upgrading process.

• Many studies have been conducted on the upgrading of low rank coals, one of them is hot water drying (HWD) method therefore the product of CWM that is produced through this upgrading method is called as hot water treatment coal slurry (HWTcs).

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The advantages of CWM

– The fact that the material is in liquid form, it permits its handling in the same way as oil or heavy oil, thus solving problems in coal transportation and handling.

– Since it is a mixture of coal and water, CWM is free from some of the major problems occurred for solid coal, such as powder dust and spontaneous ignition during storage, handling and transportation.

• Coal derived liquid type fuel is considered to be classified as follows,

– CTL (coal liquefaction) : for motor/automotive fuel, – CWM (coal slurry) : for boiler fuel

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CWM Activities in tekMIRA

• 1992-1996, CWM preparation using low rank coal and bituminous coal

• 1996-2000, CWM preparation and combustion test using bituminous coal

• 2003-now, CWM preparation and combustion test using upgraded coal by UBC process

• 2006-now, R&D of CWM joint cooperation with JGC to develop HWT-cs

• 2008-now, study market on CWM utilization

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Objectives of the Project

Immediate ObjectivesTo obtain an HWT-cs demonstration plant of 10,000 tons/year capacity to show the itself and CS combustion to candidate user in Indonesia.

Long Term Objectives- To increase the value of Indonesian low rank coal- To prevent the secure and stability of energy supply- To substitute for fuel oil

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Economical Aspect• Now, the use of marine fuel oil (MFO) for some

industries in Indonesia is 2.45 million kL/year = US $ 857.5 million (Price of MFO is US $ 350/kL).

• If it is replaced by CWM, the use of CWM is 4.9 million kL/year (1 kL MFO is equal to 2kL of CWM) = US $ 735 million (Price of CWM is US $ 150/kL)

• It means Indonesia saves US $ 122.5 million/year

• The minimum capacity of CWM commercial plant is 1 million ton/year or about 2,500 ton coal/day. The investment cost is US $ 250-320 million

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No Company’s name Product Address Number of boiler

Boiler capacity, ton/hr

Fuel type Annual consumption, KL/year

1 Amerta Indah Otsuka Beverage Sukabumi 5 x 5 25 MFO 15,000

2 PT Ultra Jaya Beverage Cimahi - Bandung 4 x 7 28 Diesel oil 16,800

3 Kalbe Farma Paharmacy Delta Sililon Industrial Estate

1 x 51 x 4 9 Diesel oil 5,400

4 Olaga Food Sukses Mandiri Food/Noodle

Jl. Industri Raya Blok H/14, Jatake Industrial

Estate, Tangerang

2 x 101 x 5 25 Diesel oil 12,000

5 PT Japfa Livestock Food Tanggarang-Banten 2 2 Gas/Diesel 1,200

6 Philip SeaFoods Indonesia

Food Jl. IR. Sutami KM 7 2 x 1 2 Diesel 1,200

7 Dian Swastatika Sentosa

ElectricitySteam

Jl. Raya Serang KM 76 Kragilan

4 10 MFO 6,000

8 Plymindo Perdana Trading, Manufactu

r

Jl. Gajah Tunggal Tanggerang

1 2 MFO 1,200

9 Andatu Lestari Plywood Plywood Serangem Panjang Bandar lampung, Km 11

2 20 Wood 48,384 M3/Y

10 Indonesia Power Electricity Tamba Lorok, Semarang 500/200MW

MFO 300,000

CWM Potential User in Indonesia (1)

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Company’s name Product Address1 Kurnia Tunggal Nugraha Cooking Oil Desa Talang Duku, Kec. Maro Sebo, Kab. Muaro Jambi

2 Sabak Indah, Pt Chemical Desa Koto Kandis, Dendang, Tanjab Timur

3 Jamika Raya, Pt CPO Desa Sekar Mengkuang, Pulau Kerakap, Tanah Tumbuh, Bungo

4 Batanghari Tembesi, Pt Rubber Jl Raden Patah, Rt 1, Kel Sijinjang, Jambi Timur, Kota Jambi

5 Tribakti Sari Mas, Pt CPO Kebun Desa Pantai - Riau

6 Riau Andalan Pulp & Paper (Rapp), Pt Pulp&Paper Jl. Lintas Timur - Riau

7 Kimia Tirta Utama, Pt Chemical Pks Pangkalan Pisang - Riau

8 Panca Eka Bina Plywood Industry, Pt Plywood Ds Merempan - Riau

9 Siak Raya Timber, Pt Plywood Suak Rengas-Sei Mempura - Riau

10 PT Perkebunan Nusantara V Sei Galuh CPO Pks Sei Galuh - Riau

11 PT Perkebunan Nusantara V Sei Garo CPO Desa Gading Sari - Riau

CWM Potential User in Indonesia (2)

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Demonstration Plant (10,000 t/y)

Coal Mine Site for Commercial Plant

Commercial Plant(1,000,000 t/y)

JAMBI

CWM Plant Location

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Closing

• The main purpose of cooperation between Indonesia and Japan is to bring the HWT-cs process to a commercial stage.

• This will mean that several commercial HWT-cs plants must be established in many places in Indonesia, especially in South Sumatera, South Kalimantan and East Kalimantan, in where most of the LRCs are present.

• In order to commercialize the HWT-cs process, a demonstration plant of 10,000 tons/year capacity as HWT-cs Model Project should be constructed.

• The Indonesian Government expects this project can be continued with optimum support from the Japanese Government.

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Thank You