IMM UCG FOR SUBSTITUTING

NATURAL GAS
IN KALTIM INDUSTRIAL ESTATE

Rapat Pengembangan UCG di Kalimantan Timur

Direktorat Pembinaan Pengusahaan Barubara, Ditjen Minerba
Bandung, 2 Juni 2021

1
Outline
1. Supply demand gas in Indonesia
2. Coal resources in east Kalimantan
3. UCG coal resource base on CBM data
4. UCG technology
5. IMM UCG implementation Road map
6. Proposed collaboration scheme

2
NATURAL GAS SUPPLY DEMAND IN REGION V
(KALIMANTAN & BALI)
Existing supply continues to decline and shortages of gas supply can be prevented by the supply from gas fields which are currently still in
the project stage (project supply). However after 2030 both the existing supply and the project supply continue to decrease from year 2026
and may not meet the gas demand in East Kalimantan

3
National Natural Gas Balance (2020-2030)
The national natural gas balance will also experience supply uncertainty after 2030 even though the demand is stagnant

Source: Presentasi Dirjen Migas

4
Coal resources
Coal in Indonesia is mainly mined in 7 economic coal basins. Potential coal basins in Kalimantan are Tarakan, Kutai, and
Barito and potential coal basins in Sumatra are Ombilin, Bengkulu, Central Sumatra and South Sumatra.

• IMM coal deposit is in Kutai coal basin

• Kutai Basin is one of the largest Tertiary basins and has the larget coal
reserve in Indonesia
• IMM coal deposit is suitable for UCG since it have impermeable rock
layer in the overburden and underburden and its synclinal shape
deposit will further reduce the UCG risk
• Total IMM Coal Resources for UCG = 127.52 million ton – can support
UCG gas production equivalent to over 1 TCF natural gas
• Additional coal deposit may be found in Coal bed methane contract
area that has been terminated

5
UCG vs CBM energy extraction rate
UCG resources is about 15 time of CBM resource, a huge amount of synthetic natural gas (SNG) will be produced if coal in CBM contract
areas are to be converted into SNG by UCG process.
List of CBM contract areas with Gas in Place (GIP) more than 2 TCF
Gas in place
NO Contractors Contract Area
(GIP) (TCF)
1 PT VISI MULTI ARTHA GMB Sangatta II, East Kalimantan 12.1
VIRGINIA INDONESIA CO. CBM CBM
2 LTD. GMB Sanga-Sanga, East Kalimantan 7.2
3 PT PHE METANA SUMATERA 4 GMB Muara Enim III, South Sumatera 5.2
4 PT PHE METANA SUMATERA 1 GMB Muara Enim I, South Sumatera 3.95
5 PT ASAM -ASAM METHAN GAS GMB Tanah Laut, South Kalimantan 3.8
6 EPHINDO KUTAI NORTH INC. GMB Kutai II, East kalimantan 3.28
7 PT BORNEO METANA ENERGI GMB Bangkanai II, Central Kalimantan 3.02
GBM Melak Mendung I, East
8 EPHINDO MEGA METHANA INC. Kalimantan 2.78
GMB Kuala Kapuas I, Central
9 PT BINA MANDIRI ENERGI Kalimantan 2.7 SNG from
10 NEWTON ENERGY CAPITAL LTD. GMB Kutai, East Kalimantan 2.69 UCG
11 PT BANGKANAI CBM PERSADA GMB Bangkanai I, South Kalimantan 2.53
12 SANGATTA WEST CBM INC. GMB Sangatta I, East Kalimantan 2.4
13 PT BELAWA ENERGI UTAMA GMB Belawa, Central Kalimantan 2.34
14 EPHINDO SEKAYU 2 INC. GMB Sekayu II, South Sumatera 2.2
UCG Methods
Two UCG methods have been developed and each claims to be superior to the others even though geological conditions
affect the performance of the UCG process.
1. Controlled retraction injection point (CRIP)
• The process wells are linked together by directional drilling, coiled
tubing is used to inject oxygen to allow injection points to be
retracted along the coal seam to maintain the gas quality.
• CRIP also allows for very long in-seam lengths of up to 1,500m, to
yield greater volumes of coal to be gasified per pair of process
wells.

2. Linked Vertical Well (LVW)

• In this concept, the oxygen injection point is on static condition, The
injection is moved to other wells after gasification has been
completed.
• Linkage between the wells is typically achieved by enhancing
natural permeability using a number of possible techniques, such
as reverse-combustion, electro-linking and hydro-fracking.
• The typical distance between the process wells is in the order of
30-50m.
7
UCG technology Development: UCG field test results
The results of the field test show that the injection well pressure continues to decrease over time. this may be due to heat of gasification increased permeability of the
coal seam. The calorific value of syngas is high at the beginning of the experiment time due to the high content of methane gas. It seams that the heat from the UCG
process also drive the release of coal bed methane

Syngas high heating value (kcal/m3)

Injection well pressure (bar)

Time (hr)

8
Notable UCG Activities in the World
UCG technology has been developed in several countries, commercial UCG power plant in Angren, Uzbekistan operated since 1960s and
now still operating. Several pilot plant test still conducted in the United States, Canada and Australia. In Indonesia 1st pilot test in 2017 by
tekMIRA

9
Road Map UCG Implementation
Road map of UCG implementation in commercial scale to produce syngas for chemical industry is proposed to anticipate the gas shortage in 2030. During the pilot
test 2023-2024, the syngas will be used as fuel of gas engine genset and PLN is expected to purchase the electric energy. Site characterization, UCG resource
calculation and syngas cost estimation has been conducted by IMM in year 2019-2020. The road map may be shorten if technology is provided by other company
through technology licensing agreement.

2026
2021 2022 2023 2024 2025 -
2028

MoU or Agreement Pilot test preparation Air blown UCG for Electricity Oxygen blown UCG for Commercial arrangement FEED-EPC
• Cost & IPR sharing • Well drilling and To clarify technical, syngas (methanol/ • Equity share • Front End Engineering
• Involvement construction environmental & economic ammonia) • Special purpose Design
• Monitoring • EPC of surface performance To clarify technical, company • Detailed Design,
facility environmental & economic • Syngas purchase Procurement &
performance agreement Construction
• Commissioning

10
UCG Pre-commercial collaboration-scheme
Best commercialization structure is syngas users to join the project as investors/developer. This structure allow syngas user
to reduce the gas supply cost. In addition from this experience and owned UCG intellectual property right the syngas user has
other opportunities to develop a new chemical plant in other mining deposit

Resource
Syngas
Intellectual
Property Right

H2
Pilot Test Commercial
task force Plant
Provider
Technology Methanol
Power Purchase
Ammonia

11
Concluding Remarks
1. Indonesia natural gas production is declining and natural gas deficit may occur after year
2030
2. The use of expensive LNG will reduce industry product competitiveness
3. Intensive research UCG has been conducted around the world however no commercial plant
of oxygen blown UCG to produce syngas for chemical industry and one of the reason is no
participation of syngas user
4. the implementation of commercial UCG plant need pre commercial stage/pilot test to obtain
technical data for the commercial plant. The pre-commercial stage need involvement of coal
mining, syngas user, technology provider and government to share the cost as well as
benefit of the precommercial test
5. Long-term stable and reliable production at lower price of gas is expected if UCG technology
is implemented due to UCG huge coal resources
TERIMA KASIH

Address
JL Ciledug Raya Kav. 109 RT.7/RW.5,
Kel. Cipulir, Kec. Kebayoran Lama,
Kota Jakarta Selatan, Daerah Khusus
Ibukota Jakarta 12230

13
UCG SynGas Utilization
Combustion Power

Ammonia,
H2 separation H2 Conversion
Urea

Syngas
UCG Methanation SNG
conditioning
DME
Methanol
Methanol Conversion
synthesis
Chemicals
Fischer- Liquid
tropsch Fuels
 UCG Gas Composition
Oxygen Blown Air Blown
Parameters Rocky Chinchilla SHS Swan Hills Bloodwood Chinchilla
Mountain I Gasifier 5 Canada Creek Panel 2 Gasifier 5
Gasifier design P-CRIP L-CRIP L-CRIP P-CRIP L-CRIP
Coal Parameters
Depth (m) 110 130 1400 200 130
Thickness (m) 7.6 5.5 7 13 5.5
Type sub-bit. sub-bit. bituminous sub-bit. sub-bit.
Dry GasCompositions(mol%)  
H2 38.5 44.5 15 20.9 20
CO 11.8 10.1 7 2.6 10
CO2 37.6 31.9 40 21.6 15
CH4 9.4 10.6 35 8.6 10
N2 2 2.7 2 44.7 45
Dry Gas CV (LHV, MJ/Nm3) 9.5 9.9 15.0 5.7 5

Source :
Greg Perkins, 2018. UCGPart: Field demonstrations and process performance, Progress in Energy and Combustion Science 67
P parallel, L Linear 15
 Underground Coal Gasification vs Surface
 Characteristic UCG Surface gasifiers
Coal mining & No coal mining required for UCG Coal mining, transport and treatment required
transport adding to costs and environmental impact
Ground disturbance Less area disturbed, as process occurs More area disturbed, as process includes
overburden removal, coal mining, coal haulage,
footprint underground
storage, etc
More expensive as coal has to be mined,
Cost Less expensive as main cost is drilling of wells transported and treated prior to feeding into
surface gasifier
Syngas quality Higher methane content due increased pressure Lower methane content due to lower operating
with depth pressures.
Can be used for deep coals that are uneconomic Can only be used for shallow coal deposits, to
Coal depth for conventional mining keep costs down
Mining activity requires dewatering of the open
Groundwater No need for dewatering. pits and/or underground operations.
Higher GHG emissions generated (see IGCC bar on
Less GHG emissions as no mining activities occurs
Greenhouse gas (see UCG-IGCC bar on graph) and there are no graph), by mining activites due to fugative GHG
emissions emissions and GHG's generated by mining
fugative GHG emissions.
equipment
STOP LNG EXPORT IS ONLY A SHORT TERM SOLUTION

17
 LNG IMPORT IS COSTLY

Komponen Baya Impor Gas Alam Biaya konstruksi Pabrik LNG

Source: https://timera-energy.com/where-will-the-next- Source: LNG Plant Cost Escalation, Oxford Institute of Energy Studies,
wave-of-lng-supply-come-from/ February 2014

18
Gas Demand and coal prepared for UCG

Description Value
Syngas Production, MMBTU/year 23,145,691
Natural gas, MMSCFD 69
Cold gas efficiency, % 75
Coal Gasified, ton/year 1,276,863
coal for pillar and unreacted coal 40%
Total coal demand, ton/year 1,787,608
coal demand for 30 years, ton 53,628,235

19
 IMM Coal Resources
Seam 19 Coal resources at thickness more than 5 meter
Sumberdaya (juta ton)
Kedalaman Lapisan Tebal Luas Total
(m) Batubara (m) (Ha) Terukur Tertunjuk Tereka (juta ton)
(measured ) (indicated ) (inferred )
200-400 C19 >5 363.65 20.89 20.89
400-600 C19 >5 719.42 43.11 43.11
600-800 C19 >5 905.38 62.74 62.74
Total 20.89 43.11 62.74 126.74

Seam 19A Coal resources at thickness more than 5 meter

Sumberdaya (juta ton)
Kedalaman Lapisan Tebal Luas Total
(m) Batubara (m) (Ha) Terukur Tertunjuk Tereka (juta ton)
(measured ) (indicated ) (inferred )
200-400 C19A >5 363.65 0.44 0.44
400-600 C19A >5 719.42 0.29 0.29
600-800 C19A >5 905.38 0.04 0.04
Total 0.44 0.29 0.04 0.77

Total Coal Resources for UCG = 127.52 million ton

20
Economics

21
Block flow diagram of the plant

Kaltim
Air oxygen UCG Geo- Gas Cooling Syngas
Industrial
Separation compression Reactor and Scrubbing transmission
estate
Tar
Liquid-liquid
Boiler
separation

Waste water
Clean Water
treatment plant
 Capital expenditure
Proportion
Cost components
cost (USD) (%) Operating Expenditure
well's drilling & construction Proportion
Cost Components Cost (USD)
cost 37,199,400 17 (%)
electricity cost 22,953,554 64.8
air separation unit coal royalty cost 766,118 2.2
51,982,748 24
Personnel cost 3,472,000 9.8
Oxygen Compressor 5,098,008 2 maintenance 6,110,571 17.2
Environmental compliance &
High pressure air compressor 1,722,494 1 abandonement 2,131,014 6.0
Total operational cost 35,433,256 100.0
Oil/tar fired Boiler 2,520,000 1
Gas cooling and cleaning 869,279 0

Waste water treatment plant 21,493,762 10

Syngas pipeline to customer 40,000,000 19

Piping and Accessories 4,000,000 2

Site facilities 15,700,000 7

Management, supervision and
Economics performance

Note: SHS & Leigh Creek produce

syngas at lower price, detail
calculation and survey is needed
Technology

25
Swan Hills Synfuels (SHS)
1. Founded in 2005; based in Calgary, Alberta, Canada
2. Swan Hills, Alberta, Canada UCG Demonstration Facility – successful UCG at 1400
m depth
3. Nearly $US 80 million expenditure on comprehensive developing and testing deep
UCG equipment – developed a UCG well pair standardized design ready for use in
commercial projects
4. SHS is interested in sharing its deep UCG knowledge, expertise and operating
experience with companies in Indonesia, on an expertise sharing/consulting basis.
5. SHS is not seeking UCG investment opportunities in Indonesia

Note: tekMIRA KESDM has signed MoU with SHS for UCG commercialization in Indonesia

26
Leigh Creek Energy (LCK)
1. Leigh Creek Energy is a South Australian based, ASX listed company
2. LCK performed a pilot project trial in 2018/2019 satisfying stringent conditions imposed by the South
Australian Regulator
3. LCK has conducted pre FS UCG for ammonia with the following results
a. Annual urea plant capacity of 1.0 million tonnes per annum
b. Initial capital cost $2.3 billion
c. Commercial life of over 30 years
d. Nominal production cost of $109/tonne
e. Pre-tax leveraged Net Present Value (NPV) $3.4 billion
f. Internal Rate of Return (IRR) 30%

27
tekMIRA KESDM
ESDM Balitbang has developed UCG technology since 2014. The activities carried out include site selection, site characterization (subsurface analysis,
drilling, geological and hydrogeological analyzes), UCG simulation and field test. We also have contributed in set up of UCG regulation. UCG Field Test has
been conducted at PKP2B PT. Astaka in South Sumatera, at depth of 100 meter

Regional Map of UCG Location

UCG Commercialization Barriers
1. Only 1 commercial plant in the world and it produce low CV gas for electricity at small capacity (10MW)
or 90.000 ton-coal/year (tpy-coal)
2. Large scale (>1 tpy-coal), oxygen blown and consistent gas quality UCG plant is required in order to
integrate UCG with chemical/fertilizer plant however no such commercial UCG plant is currently
available
3. Mismatch between technology developer expectation and syngas user expectation
• Technology developer is confident to produce syngas at desired quality
• Syngas users ask UCG developers to prove their technology in the long run whereas long-term trials without revenue will
be costly
4. Pilot plants of oxygen blown UCG for syngas has been developed but have not been commercialized
• SHS due to regulation of CO2 storage in Canada
• Linc Energy and Carbon Energy in Queensland in Australia due to unceratian regulation
• Leigh Creek South Australia is still in the planning stages of a commercial plant

29
Risk and mitigation
Risks Risk description
Environmental Leak of pollutants to aquifer
Operation High pressure operating
conditions
Gas composition Fluctuation of gas
composition
Investment Scale Delay of Investment due to
huge investment value
Public Perception the public is reluctant to
accept UCG due to
unclarified information
Mitigation
Setup Proper site selection criteria and standard
operating procedue
Implement standard operating procedure of
petrochemical industry
-Gas composition spec should be based on pilot
test result
-Install gas conditioning facility (CO2 & H2S
removal integrated to UCG plant
Start with small scale plant (electricity) to reduce
the investment scale and to create revenue
Educate the public
30
Proper site selection and installation of groundwater monitoring well

Air/Oxygen injection Syngas with polluted water Monitoring well (Piezometric & water qualities)

River
Water table
u ifer
n e d A ystone)
q
ne)
o nfi , c l a ysto
C tone , cla
q uifer (mu
d s
ston e
da d e u d
nfine iclu d e (m
Un co Aqu itar d )
q uic lu
(a q u A
Coal
ze ne ne
e n y le
ctor Tar B X
Re a ol
Geo 00o C Ph e n
luen e
+ 10 To
2 , C H4,
CO, H , N2
CO2
UCG operation protocol
UCG operational
Pressure must lower
than hydrostatic
pressure Water table

A total of fourteen monitoring bores have been

installed at the Linc Energy site. Monitoring bores
have all been installed in the target coal seam. The
results of monitoring indicate no broad-scale
impacts on groundwater quality. This suggests that
inwards groundwater flow to the gasifier is
effective in “flushing” any build-up of the
pollutants that may have occurred due to
temporary incursion of gas from the gasifier.
Objective Pre-commercial/Pilot Test
• Determine UCG commercial plant operating condition (pressure, oxygen/steam ratio)
• Investigate the syngas quality and volume consistency
• Observe the environmental performance
• Estimate the syngas production cost
• Obtain technical data for Front End Engineering Design or Detailed Design

33
UCG-CO2 Enhanced Oil Recovery (EOR) Opportunity

1. UCG development in Bontang-Samarinda area can provide: Bontang LNG; Kaltim MeOH;
Pupuk Kaltim NH3
a. Synthetic gas - to existing LNG, methanol and/or
ammonia gas demand in Bontang High-
Potential
b. CO2 for EOR in Mahakam Block fields UCG
Development
2. UCG is gas and CO2 manufacturing Area

a. Long-term stable and reliable production – no

decline
b. Long-term stable cost of gas and CO2
c. Can produce very large quantities of gas and CO2:
i. Equivalent of several TCF of natural gas
ii. Hundreds of millions of tonnes of CO2 for EOR

34
UCG-CO2 EOR Development Concept
Very attractive economics – UCG-CO2 EOR indicated project IRR’s in 20% range at conservative commodity prices
CO2 sequestration makes overall project very low (near-zero) carbon intensity ammonia, methanol, LNG and oil production

Oxygen UCG Gas SNG

Processing Methanation
UCG Well Field Water
Air Separation Bontang LNG LNG
Gas Cleanup
CO2 Removal
Raw UCG Gas Water Recovery
Clean
Deep Coal CO2 UCG
Gas

New UCG Project

Oil and Kaltim Methanol Methanol
Condensate and
Reservoirs for Pupuk Kaltim
CO2 EOR CO2 Ammonia Ammonia

Increased Oil Production

35
 Site Selection Criteria (CSIRO)

• Coal seam >10 m thick

• Ash content <40% (ad basis)
• Rank less important, although low rank coals may have
high moisture and high rank may be hard to ignite
• Well-defined seam with minimal discontinuities
• Seam dip <20°
• Depth 300-400 m with high hydrostatic head
• Overburden with low permeability that is structurally
sound
• No good water aquifers in vicinity
• Surface suitable for low impact use and some subsidence
• Scale of deposit matched to economics of utilisation (eg
power plant size)

Andrew Beath, Stuart Craig, Anna Little boy, Rusty Mark and Cliff Mallett, 2004, Underground Coal Gasification: Evaluating
Environmental Barriers, CSIRO
 SITE SELECTION FOR UCG Literature (Greg Perkins)
Kategori Parameter Rekomendasi
Umum Sumberdaya batubara >100 Juta Ton
Lokasi Tidak berada di remot area
Topografi Flat sampai dengan undulasi sedang
Kondisi Geologi Sederhana
Lapisan batubara Rank Sub-bituminus dan lapisan batuan yang berkarakter low swell
Kualitas Abu dan Sulfur rendah
Ketebalan Disarankan >6m
Kedalaman Disarankan >200m
Permeabilitas Rendah, <100mD
Patahan dan sisipan Minimum
Geometri Flat <20° dip
Batuan penutup Litologi Shale, siltstone, mudstone, silicified sandstone
Ketebalan Tebal >40m disarankan
Kekuatan batuan Lebih besar dari litostatic
Permeabilitas Rendah. <20mD
Hidogeologi Jarak ke akuifer Todak ada akuifer di jarak <60m.
  Kualitas air Jelek
  Tekanan hidraulic >20bar

37
 Site Selection Criteria (KESDM)
GOVERNMENT REGULATION FOR UCG

1
Lapisan batuan atas (roof) dan
bawah (floor) lapisan batubara
impermeable;

5
Kondisi struktur geologi tidak
kompleks (sederhana s.d. moderat)

2
Ketebalan lapisan batubara paling
kurang 5 (lima) meter
Memiliki kadar abu dan air kurang
dari 60% (enam puluh persen)
6
3
Kemiringan lapisan batubara (dip)
kurang dari 5º (lima derajat)

Memiliki rank batubara tidak lebih

dari bituminous
7
4
Kedalaman lapisan batubara lebih
dari 200 (dua ratus) meter
Kepmen 1827

38

1. Aturan Praktis Operasi
a. Tekanan operasi lebih rendah
dibandingkan tekanan hydrostatis
b. Pengendalian operasi UCG telah
dimuat dalam Kepmen ESDM No.
1827 K/2018
Linc Energy Case
2. Fakta persidangan Kasus UCG di Queensland adalah
pelanggaran aturan praktis (pengunaan tekanan operasi
diatas tekanan hydrostatis)
• Pressures of between 28 and 48 bar were used in gasifier
2.
• Pockets of syngas were intersected in the overburden
during drilling for gasifier 3.
• Gasifier 4 exhibited gas escapes from monitoring bores
and bubbling of gas at the surface.
• Gas escapes from monitoring bores over the operational
period of gasifier 5.
• Gasification pressure in gasifiers 2–5 consistently
exceeded hydrostatic groundwater
• pressure