MHI, MC to collaborate with Indonesia in natural gas synthesis project

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Mitsubishi Heavy Industries Ltd (MHI) and Mitsubishi Corp (MC) have agreed with the Indonesian government to collaborate in a large-scale substitute natural gas synthesis project utilizing Indonesia’s abundant low rank coal which is conducted by MHI/MC and Indonesian partners (government institution and private company), as a follow up of Indonesia-Japan Energy Round Table held in November 2010.

A feasibility study has already gotten under way with support from the Indonesian and Japanese governments. MHI, MC and Indonesian partners plan to complete the study by March 2012, targeting inauguration of commercial operation at a new synthesis plant in 2017.

The project plans call for production of natural gas synthesis at the new plant, to be built by MHI and Indonesian partners, through coal gasification using abundant low rank coal in Sumatra. The large amount of carbon dioxide (CO2) produced as a “by-product” of the plant’s operation will be sequestered deep underground applying a carbon capture and storage system. The project will also study partial use of the CO2 for enhanced oil recovery (EOR). EOR is a method for boosting crude oil production by injecting CO2 into an oil reservoir suffering from low productivity – a feat difficult to achieve using conventional methods.

The Japanese side plans also call for introduction of a “bi-lateral offset mechanism,” based on the agreement between the governments of Indonesia and Japan, whereby the amount of greenhouse gas reduction achieved through the project would be reflected in Indonesia and Japan emission reduction efforts. If realized, the project will thus contribute significantly to environmental and energy initiatives.