Construction of the $21 billion (£15.8 billion) Abadi Masela liquefied natural gas (LNG) project in Indonesia has begun this month, marking a major step for one of the country's largest energy developments. The project is expected to significantly enhance domestic energy security.
Project Details and Timeline
Located in the Masela Block in eastern Indonesia, the project is being developed by Japan's Inpex Corp in partnership with Indonesia's Pertamina and Malaysia's Petronas. Production is scheduled to start around 2029 or 2030, with an estimated output of 9.5 million tonnes of LNG annually. Additionally, it will produce 150 million standard cubic feet per day of pipeline gas and 35,000 barrels of condensate a day.
Domestic Focus and Downstream Industries
Indonesia's Minister for Energy and Mineral Resources, Bahlil Lahadalia, stated that 60% of the gas output will be allocated to the domestic market, with priority given to downstream industries such as fertiliser production and feedstock. The project also incorporates carbon capture and storage technology, making it one of Indonesia's first large-scale LNG developments to integrate emissions reduction from the outset.
Decades of Delay Overcome
The Abadi project had been delayed for decades. The initial agreement was signed in 1998 but faced setbacks due to years of exploration, plan changes, and prolonged investment negotiations. In 2016, the Indonesian government decided to construct the development onshore rather than offshore, leading to a redesign and increased costs.
Strategic Importance for Indonesia
The Abadi Masela gas field holds an estimated 6.97 trillion cubic feet (TCF) of natural gas reserves, making it one of Indonesia's largest undeveloped offshore gas resources. Indonesia was once the world's largest LNG exporter but lost market share as ageing fields declined and new projects faced delays. President Prabowo Subianto prioritises energy self-sufficiency and downstream processing of natural resources to attract foreign investment. He said: “We must continue downstream industrialisation, which requires energy. Indonesia has abundant energy resources, and despite global uncertainties, we have the resilience and measures in place to keep the country on a stable course.”
