Sasol will build coal-to-liquids plants in Indonesia with a targeted combined capacity of 1.1 million barrels per day. Production is expected to begin in 2015, according to Indonesia’s Department of Energy and Mineral Resources. Feasibility studies are currently underway.
Although a member of OPEC since 1962, Indonesia became a net importer of oil in 2004 as a result of rising domestic consumption and declining production due to disappointing exploration efforts and the decline of Indonesia’s large, mature oil fields. Indonesian oil production peaked in 1991 at 1.669 million barrels per day, according to the BP Statistical Review of World Energy 2008; production in 2007 was 969,000 barrels per day. The Indonesian government earlier this year agreed on a production target for 2009 of 960,000 barrels per day.
Despite declining production, the government has raised the target output for 2010 to 1.1 million barrels per day (bpd). Director General of Oil and Gas at the Energy and Mineral Resources Ministry Evita Legowo said the government would rely on a number of fields, including the new Cepu Block (one of the country’s biggest oil finds in a decade) and those owned by state oil and gas company Pertamina, to achieve the production target.
Salis Aprilian, Pertamina’s director for the Cepu block, said production will peak at around 165,000 bpd in 2012. “Cepu will produce 20,000 bpd for about three years before reaching its peak level of around 165,000 bpd in 2012, depending on the development,” he said.
Earlier, the Upstream Oil and Natural Gas Executive Body (BP Migas) projected Indonesia’s oil and condensate production would reach 911,000 bpd in 2010. According to the BP Statistical Review, Indonesian domestic consumption of oil hit 1.157 million barrels per day in 2007, up 1.9% from the year before.
Sasol will work with several local raw materials firms, including top coal miner PT Bumi Resources Tbk and state-owned oil firm PT Pertamina, to produce oil products from low-grade lignite.
According to US Energy Information Administration estimates in 2007, Indonesia has 5.5 billion short tons of recoverable coal reserves, of which 85% is lignite and sub-bituminous. Roughly two-thirds of the country’s coal reserves are located in Sumatra, with the balance located in Kalimantan, West Java, and Sulawesi. According to EIA statistics, Indonesia was the second largest net exporter of coal in the world in 2004, with 118 MMst of apparent net exports.