Indonesia - Methanol.

Indonesia's first methanol plant was built in the 1980s on the Bunyu Islands. Designed to export 80% of its output, the plant has a capacity of 330,000 t/y. It is owned and run by Pertamina, the state oil and gas company.

PT Kaltim Methanol Industri, part of the Kaltim group, is having a methanol complex built in East Kalimantan with a capacity of 660,000 t/y. Construction began in January 1995 and was supposed to be completed in 1997. Work on this was delayed, however, due to involvement in the venture by Suharto's family and the unrest in 1998.

The project was conceived in 1990 by Kaltim to be part of his fertilisers complex near Bontang and its capacity was then planned to be 330,000 t/y. In 1991 it was frozen due to government regulations controlling the inflow of offshore loans for projects controlled by the state. After intervention by the Suharto family, government approval was given in 1993 and the project was revived, but this time as a private joint venture between the local company Humpuss (80%) and Nissho Iwai of Japan (20%). Humpuss, owned by Suharto's third son, Hutomo Mandala Putra, played the key role behind the government's approval. The project's cost rose to about $350 million, for which a loan of $260m was arranged by Nissho Iwai in late 1994. Methanex Corp., world leader in the methanol business, had considered a proposal to either join the Kaltim partnership or build its own methanol complex in Indonesia.

Although the plant was completed in late 1998, there were start-up problems and disagreements between Humpuss and Nissho Iwai. Subsequently the partners agreed to take some of the output but at low prices.