Indonesian petrochemical company Putronas plans to invest $1 billion in building a methanol plant with an annual production capacity of 1 million tons

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Recently, Ignatius Talunembang, president of the Indonesian startup company Butonas Petrochemical, said the company plans to invest $1 billion in building a new methanol plant with an annual production capacity of 1 million tons in Bojonegoro, East Java. Once operational by 2029, this plant is expected to meet domestic demand and contribute to the achievement of **energy goals. This methanol plant has been listed as one of Indonesia’s 77 **strategic projects for the period 2025 to 2029. 　　Taluleng Bong revealed that Indonesia’s annual methanol consumption is around 2.35 million tons, while the supply provided by the local KMI Methanol Industry Company amounts to only about 680,000 tons; thus, there is a shortage of 1.75 million tons that needs to be covered through imports. The Bozonegoro methanol plant was built precisely to fill this gap. 　　Butonas Petrochemical plans to start operating this methanol plant in 2029, a time when Indonesia will fully implement its B40 and B50 biodiesel blending policies, resulting in a high demand for fatty acid methyl esters (FAME). Thalubun said, “Methanol is a key raw material for biodiesel synthesis, and as Indonesia expands its renewable fuel programs, demand for methanol is expected to rise significantly.” ” 　　Thalouenbon noted that Botnas Petrochemical has chosen the French company Air Liquide as its technology provider, and its steam methane reforming (SMR) design has been optimized in terms of scalability, energy integration, and environmental performance. This 130-hectare factory will use 90 million cubic feet of natural gas and 24 million cubic feet of carbon dioxide as raw materials each year, with these materials coming directly from the JTB natural gas processing plant located nearby and operated by Cepu, a subsidiary of Indonesia’s **Oil Company. Taluren Bang confirmed that negotiations with the Indonesian **Oil Company regarding the Natural Gas Sales Agreement are in the final stages, with a signing planned for the fourth quarter of 2025. He said that the combined use of emitted carbon dioxide not only helps reduce emissions but also increases methanol production, in line with global low-carbon standards. 　　Butonas Petrochemical also plans to build a bioethanol plant next to the methanol plant in order to support Indonesia’s transition to clean energy, but the project is currently in the “early development stage”.