Indonesia Breaks Ground on $21B Masela LNG Project

Gotrade News — Indonesia has officially broken ground on the massive Masela gas block, finally moving forward on a project that has been on the books since its original contract was signed in 1998. President Prabowo Subianto led the ceremony for the Abadi LNG project in Saumlaki, Tanimbar Islands, on Wednesday (July 16). According to Kumparan, the mega-development comes with a USD 20.95 billion (around Rp 390 trillion) price tag, making it one of the largest and most anticipated energy plays in eastern Indonesia.

The headline decision is how the gas will be split. Energy and Mineral Resources Minister Bahlil Lahadalia stressed that the bulk of production will feed Indonesia's own market, a clear signal for the country's push to build out domestic energy processing.

Bahlil Locks In 60% of Gas for Domestic Use

Per Kumparan, Bahlil said the allocation will prioritize national needs. "At least 60 percent of the gas will go to meet domestic demand, and 40 percent for export," he said. The domestic share is earmarked to supply state fertilizer maker Pupuk Indonesia, utilities PLN and PGN, and private industry, part of Indonesia's downstream industrialization drive.

Masela is designed to produce 9.5 million tons of LNG per year, 35,000 barrels of condensate per day, and piped gas for domestic consumption. As reported by Liputan6, construction work began immediately with the drilling of 11 development wells plus four additional wells, employing an estimated 12,000 workers during the construction phase.

Rp 2,492 Trillion GDP Contribution Through 2055

On the fiscal side, the project, which holds National Strategic Project (PSN) status, is projected to deliver a massive economic footprint. According to Kompas, Masela is expected to add up to Rp 2,492 trillion to Indonesia's GDP through 2055, including Rp 568.3 trillion for Maluku province, with direct state revenue estimated at USD 37.8 billion. "The output will be used to build fertilizer plants and other investments here," Bahlil said, as quoted by Kompas.

Masela is operated by a consortium of INPEX Masela Ltd, Pertamina Hulu Energi Masela, and Petronas Masela. Megaprojects of this scale are often a reference point for global energy majors, and investors tracking the worldwide oil and gas sector typically watch large players such as Exxon Mobil (XOM), Chevron (CVX), and Shell Plc (SHEL), all of which are active in large-scale LNG developments across multiple countries. Per Liputan6, the project's FEED progress had reached 79.56 percent as of July 2026, with a final investment decision (FID) targeted for late 2026 and production slated for 2029-2030.

Sources

• Masela Block Officially Under Development, Bahlil Confirms 60% of Gas for Domestic Use (Kumparan)
• Masela National Strategic Project Projected to Boost Indonesia's GDP (Kompas)
• Construction of Rp 390 Trillion Abadi Masela Project Begins Today (Liputan6)