Celanese signs MOU with PERTAMINA to advance fuel ethanol projects in Indonesia using TCX process

5 March 2013

Celanese Corporation signed a Memorandum of Understanding (MOU) with Pertamina, the state-owned energy company of the Republic of Indonesia, and will begin the detailed project planning phase for the development of fuel ethanol projects in Indonesia. (Earlier post.)

In line with its long-term strategy to develop new and domestic energy capabilities, Pertamina is working with Celanese jointly to develop synthetic fuel ethanol projects in Indonesia utilizing Celanese’s proprietary TCX ethanol process technology. (Earlier post.)

TCX builds on Celanese’s acetyl platform and integrates new technologies to produce ethanol using basic hydrocarbon feedstocks—natural gas, coal and pet coke now, with biomass and waste planned for the future.

Celanese and Pertamina have successfully completed the objectives of the previously announced Joint Statement of Cooperation, which included identifying potential production locations, confirming coal supply options and developing an ethanol distribution strategy.

The MOU outlines the parties’ intentions to establish a joint venture partnership under which Celanese would maintain a majority share and would license its leading TCX Technology to the joint venture under a separate technology licensing agreement. The detailed financial terms of the joint venture partnership and licensing arrangement have not been finalized; however, the capital investment and financial returns for the venture are expected to be consistent with those previously announced by Celanese for fuel ethanol projects.

Under the detailed project planning phase of the MOU, Celanese and Pertamina will select the first production location, initiate project permitting, and negotiate coal supply and other industrial partner agreements. Celanese and Pertamina expect to complete this phase of the MOU by the end of 2013.

Celanese and Pertamina expect the production of fuel grade ethanol to begin approximately 30 months after final investment decisions by each company and receiving all necessary government approvals.

The development of ethanol business is in line with the Government of the Republic of Indonesia’s policy to implement Indonesian target in Energy Mix 2025. This initiative has triggered us, the National Energy Company of Indonesia, to develop clean, renewable energy and new energy for diversification, by increasing the contribution from gas and other non-fossil energy contribution, as well as liquefaction coal which is targeted to contribute about 2 percent by 2025. To meet this goal, we are pleased to partner with Celanese on the development and application of new forms of energy, such as synthetic fuel ethanol.

—Karen Agustiawan, President Director and CEO, PT Pertamina