To reduce Indonesia’s dependence on imported liquefied petroleum gas (LPG), the Ministry of Energy and Mineral Resources (ESDM) is hastening efforts to advance LPG downstreaming. The initiative, led by ESDM Minister Bahlil Lahadalia, focuses on bolstering domestic production capabilities, thereby minimizing the need for foreign-sourced LPG.
During a press conference on Monday, November 4, 2024, Minister Bahlil stressed the importance of building local infrastructure for LPG production. “[That’ll be possible] if we mandate the downstreaming of LPG,” he stated.
Central to this initiative is the establishment of local LPG production plants, which will be primarily managed by Indonesia’s state-owned energy company, PT Pertamina, with additional input from private sector participants. “I will discuss with Pertamina to determine their role and the involvement of the private sector in accelerating this industrialization process,” he added.
Indonesia has significant resources that support this shift, including an estimated 1.8 million barrels of propane (C3) and butane (C4), crucial components for LPG manufacturing. Bahlil underlined the government’s dedication to optimizing these domestic assets, asserting that relying more on local resources could substantially decrease the nation’s dependence on imports.
The ESDM Ministry is also exploring options to enhance LPG’s versatility by converting it into dimethyl ether (DME), an alternative fuel that the government aims to produce extensively by 2035. While Bahlil expressed optimism about integrating DME into the LPG downstreaming process, he clarified that DME conversion is encouraged but not mandated.
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