FINANCIAL FEASIBILITY STUDY OF TRANSPORTATION OF DI-METHYL ETHER (DME) AS A PRODUCT OF COAL GASIFICATION THROUGH PIPELINE FROM TANJUNG ENIM TO PULAU LAYANG BY PT PERTAMINA GAS

• Main Author: Manatap Limbong, Mangiring
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/55724
• Institution: Institut Teknologi Bandung

Energy is one of the basic needs in improving the quality of human life. The available energy sources must be utilized to generate added value for its users. Coal is one of the most abundant energy sources in Indonesia with total production 400 million ton annually. Currently coal is still used directly so that the added value produced is not optimal yet. Coal gasification is a government program and has been designated as a national strategic project based on Presidential Decree No 109/2020 where Dimethyl Ether (DME) products which produced from coal gasification can be used as fuel to replace LPG. The LPG to DME conversion program is expected to be able to reduce the government's burden on LPG subsidies and reduce LPG imports which are increasing every year. The government has launched production of totally 1,9 million tons of DME in 2050 and one of the current program is the construction of a DME Plant in Tanjung Enim which is a collaboration between PT Pertamina (Persero), PT Bukit Asam, Tbk, and Air Products & Chemical, Inc with a total production of 1.4 million MT / year. One of the main challenges of developing DME is the long distance between the DME source and the consumer, so that a reliable and safe transportation system is needed to distribute DME to consumers in an efficient cost. Pipeline is one of the best transportation methods for delivering a product because it is reliable, high availability, and much safer. Pertamina Gas is one of the oil and gas transporter companies in Indonesia which has decades of experience in the transportation business through pipelines. The construction of the Tanjung Enim-Pulau Layang DME pipeline is a new challenge for Pertamina Gas because this project is the first project in Indonesia and is still not widely applied abroad. The main challenge for Pertamina Gas is how to generate a competitive DME pipe toll fee and on the other hand still generate business growth for the company. In this research, the author conducted a comprehensive analysis both quantitatively and qualitatively to get a conclusion whether this project was feasible to be run by the company. From the qualitative analysis results, the general results show that this business is a prospective business and provides a competitive advantage for Pertamina Gas, while from the quantitative analysis, the DME pipe toll fee value is 22.9 USD / MT which results in economic parameters at the equity level is NPV of US$ 17.939.799, IRR 16,54%, Payback Period 13 years and Profitability Index 1,22. From these results it can be concluded that the DME pipeline project is feasible to continue because it can generate business growth for Pertamina Gas in the long term.