South African petrochemicals group Sasol and the government of Indonesia have agreed to undertake a screening study into the viability of constructing a proposed 80 000-bl/d coal-to-liquids (CTL) project in the Asian country using Sasol’s technology.

Sasol Synfuels International MD Ernst Oberholster and the chairperson of the Republic of Indonesia’s Investment Coordination Board, Gita Wirjawan, this week signed a memorandum of understanding to cooperate on the project.

Wirjawan had told Reuters earlier this week that the investment for the project would exceed $2-billion.

Based on the outcome of the screening study, Sasol’s proprietary technology could be used to produce about 80 000 bbl/d of clean, high-quality transportation fuels from Indonesia’s domestic lignite coal reserves.

Sasol stated that Indonesia’s wealth of stranded coal resources, coupled with the country’s strategic drive for enhanced energy security, were two elements that made the country an ideal location for a CTL facility.

The facility could make a significant contribution to the Asian country’s economy through savings in foreign exchange, skills development and job creation, as well as the production of value-adding products, the group noted.

Sasol operates the world’s only commercial scale coal-based synthetic fuels manufacturing facility, in Secunda, in South Africa.

It was planning to build an 80 000-bl/d CTL plant, called project Mafutha, in South Africa’s Limpopo province, which was expected to come on stream by 2016.

The group was also studying the potential of building an 80 000-bl/d CTL plant in China, at a reported cost of $7-billion.

Construction on the plant, which was being undertaken in cooperation with China’s Shenhua Ningxia Coal Industry Group, was expected to start in October next year.

Sasol was also looking at potential CTL projects in India.