Jakarta, indomaritim.com – Indonesia has begun construction of a large-scale liquefied natural gas (LNG) project in the Masela Block, Tanimbar Islands District, Maluku, on July 16, 2026, taking a major step toward becoming an energy powerhouse.
President Prabowo Subianto virtually broke ground for the strategic project, dubbed Abadi Masela, from the Merdeka Palace in Jakarta, a ceremony that capped decades of bureaucratic deliberations since a contract was signed in 1998.
According to Antara News Agency, it took six presidents over nearly three decades for the nation to finally launch the project, from B.J. Habibie to Prabowo.
Nature was never the obstacle, as no one doubted the vast LNG reserves awaiting exploration and extraction at the site. The delay stemmed from contention over whether to develop facilities onshore or offshore, with the former eventually favored.
Over 28 years of debate, the project underwent several changes in its consortium structure, with Shell withdrawing in 2023 and Pertamina taking over shares alongside Petronas.
Consequently, ownership is now split between Japan’s INPEX Masela Ltd. (65 percent), Pertamina Hulu Energi Masela (20 percent), and Malaysia’s Petronas Masela (15 percent).
While the president commanded remotely from Jakarta, Energy and Mineral Resources Minister Bahlil Lahadalia led an onsite ceremony in Tanimbar.
The simultaneous ceremonies across locations thousands of kilometers apart marked a major milestone for the project’s development.
Technical preparations advanced, with front-end engineering design progressing to 79.56 percent as of early July, way ahead of schedule. The final investment decision is expected by year-end.
Just as crucially, the landmark project passed Indonesia’s Environmental Impact Assessment (AMDAL) in February 2026, ensuring compliance with ecological standards.
In fact, three state-owned enterprises—PLN, PGN, and Pupuk Indonesia—have secured initial LNG purchase agreements tailored to their respective sectors: electricity, gas, and fertilizer.
It was revealed that the project largely owed its feasibility to an investment worth nearly US$21 billion.
Such an amount is nothing short of staggering and, in turn, is projected to contribute up to US$137.7 billion to national GDP by 2055, according to the Institute for Economic and Social Research, University of Indonesia.
The block’s LNG output is forecast to generate Rp801.5 trillion, roughly US$45 billion, in state revenue, spanning tax and non-tax receipts.
Framing the three-decade horizon fairly, the prolonged preparations stand as proof of Indonesia’s tenacity to tap the massive energy reserves hidden in its eastern flank.
The newly launched construction phase is expected to generate 12,000 jobs, with the government prioritizing local workers and talent from Maluku and the Tanimbar Islands.
On top of that, the government envisions LNG facilities creating a multiplier effect, driving the rise of supporting industries and opening wider business avenues for micro, small, and medium enterprises.
Adding another layer to the story is the detail that securing the project perimeter required clearing customary land plots passed down across generations without paperwork. The careful approach taken could set a valuable precedent for other national strategic projects in eastern Indonesia.
Energy security, cleaner path
Abadi Masela stands out among LNG projects of its scale, having been designed to integrate carbon capture and storage (CCS) technologies from the outset.
Indonesia is positioning the project as its first major energy venture that seeks a balance between fossil fuel production and carbon emission containment.
The government gave the nod to incorporating CCS into the LNG project in late 2023, opting for a cost recovery scheme that sets a single stage for gas extraction and emission curbing to proceed side by side.
That very decision presents Abadi Masela with dual functions. The gas field is envisioned to sustain domestic supplies over the long term while serving as a testing ground for Indonesia to press ahead with its energy transition agenda without abruptly abandoning fossil sources.
Indonesia views a gradual approach to energy transition as the most realistic option, given its ongoing dependence on fossil fuels for primary energy. The country is treading a well-calculated path toward clean energy.
The groundbreaking for Abadi Masela came just as countries around the globe anxiously watched worsening instability in energy markets amid souring geopolitics.
The Strait of Hormuz, famous as a vital chokepoint for global oil shipments, fell victim to the war involving the United States, Israel, and Iran in early 2026.
Mounting tensions in the waterway quickly transcended traditional security concerns, prompting many nations to re-evaluate their energy security.
Indonesia is not spared, as war-induced hikes in global prices force Southeast Asian nations to adjust fuel costs.
In support of low- to middle-income citizens, the government insisted on keeping subsidized fuel prices intact, making adjustments only to products beyond the subsidy scheme.
That move, however, raises the question of whether Indonesia can withstand fiscal pressure as the cost of safeguarding fuel subsidies.
In that context, five national strategic projects in upstream oil and gas, with a combined investment value of around US$45.82 billion, are seen as key to preventing Indonesia from falling into a fiscal-energy trap.
Abadi Masela stands as one of the projects, promising the nation up to 9.5 million metric tons of LNG annually, with an estimated 150 million standard cubic feet per day allocated to domestic pipelines. That said, expanded output signifies a leap away from global price influence.
Ultimately, the project’s strategic value goes beyond investment figures or jobs created in Maluku. It is part of a larger calculation of how far Indonesia can move from being a price taker in global energy markets toward securing its own supply resilience. (RR)
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