The US-based Celanese Corporation, a leading producer of chemical products, will jointly begin the construction of an ethanol plant with state-owned oil and gas company PT Pertamina in the second half of this year.
The plant will form the initial part of Celanese's overall ethanol plant project in Indonesia that would amount to US$2.5 billion, Industry Minister MS Hidayat said on Friday in Jakarta.
"This month, the firm will decide the location of the plant, which can be in Palembang [South Sumatra] or Bontang [East Kalimantan] and after that it will kick off the project," Hidayat told reporters after meeting the firm's executives at his office.
The firm also planned to request a tax holiday provided by the government, he added.
Earlier last year, the Texas-based firm said that its ethanol plants would convert 4 million tons of coal into 1.3 billion liters of ethanol each year.
By developing a 10 percent high-octane fuel ethanol blend by 2020, the firm will help Pertamina cut its dependency on gasoline imports by over 30 million barrels a year.