After 28-Year Wait, Masela Block's Abadi Project Officially Breaks Ground

The Abadi Project in the Masela Block has finally entered the groundbreaking phase after nearly three decades on the planning table. The ceremony, held in the Tanimbar Islands Regency, Maluku, on Thursday (16/7/2026), marks a turning point for one of the largest gas projects ever developed by Indonesia. For the oil and gas industry, this agenda means the project, valued at approximately US$20-22 billion or equivalent to Rp300 trillion, is moving from the design stage to physical construction. The journey of the Masela Block has indeed not been short. The Production Sharing Contract (PSC) was signed in 1998, while the discovery of the Abadi Field opened new hopes for the vast gas reserves in the Arafura Sea. Since then, the project has repeatedly undergone adjustments due to changes in development concepts, partner changes, and land acquisition settlements. The Abadi Field is located about 150 kilometres south of Yamdena Island, Tanimbar Islands, Maluku. Its deep-sea location means its development requires massive investment and highly complex technology. This factor is one of the reasons why the project took a long time before entering the construction phase. Its economic value is also enormous. The government estimates the investment will reach US$20-22 billion. This figure places Masela as one of the largest upstream oil and gas investments in Indonesia in recent decades. The project is managed by INPEX Masela Ltd. as the operator with a 65 per cent ownership stake. PT Pertamina Hulu Energi holds 20 per cent, while Petronas Masela Sdn. Bhd. owns 15 per cent. This structure was formed after Shell decided to divest its ownership several years ago. The development concept makes Masela different from other gas projects. Initially, the gas liquefaction facility was designed using Floating LNG (FLNG) at sea. The government later changed its policy direction and opted for the construction of an onshore LNG plant so that the economic impact would be greater for the Maluku region. This decision meant almost all engineering designs had to be redone, including the Front End Engineering Design (FEED) study, causing the project schedule to shift again. Now all these stages have been passed. The government has designated the Abadi Project as a National Strategic Project (PSN), while various issues regarding permits, land acquisition, and coordination with the community were resolved by mid-2026. In terms of production, Masela is projected to become one of the backbones of Indonesia’s gas supply by the end of this decade. The Abadi Field is estimated to hold reserves of around 3.06 trillion cubic feet (TCF) of gas and 119 million barrels of condensate. Once operational, the project is targeted to produce around 10.5 million tonnes of LNG per year (MMTPA) and supply approximately 1.5 billion cubic feet of gas per day (BCFD) for domestic needs and export. The first production target is set for the 2029-2030 period. Masela arrives as Indonesia faces the challenge of maintaining long-term gas supply. Several oil and gas fields that have been supporting national production are experiencing natural decline, while the need for gas for industry, power generation, petrochemicals, and downstream programmes continues to rise. The additional supply from the Abadi Field is expected to help maintain the balance of the domestic gas market while preserving Indonesia’s position as an LNG exporter. The impact is also expected to be felt in the eastern region of Indonesia. The construction of the LNG plant, subsea pipelines, offshore production facilities, ports, and supporting infrastructure is projected to boost economic activity in the Tanimbar Islands. Demand for construction services, logistics, transportation, accommodation, and local labour is expected to increase as development progresses over the next several years. The groundbreaking does not mean all challenges are over. The construction phase of this mega-scale oil and gas project requires cost discipline, schedule certainty, and cross-agency coordination to ensure the production target at the end of this decade can be met.