Construction Begins: 60% of Masela Block LNG Earmarked for Domestic Needs

Energy and Mineral Resources Minister Bahlil Lahadalia has announced that a minimum of 60 per cent of gas production from the Masela Block’s Abadi LNG Project will be prioritised for the domestic market, with the remaining 40 per cent destined for export. The statement was made during the project’s groundbreaking ceremony, which was attended by President Prabowo Subianto. Bahlil explained that the government has decided to allocate the majority of the gas to support the national downstreaming programme and energy security. The domestic gas supply will be utilised to support downstream industries, including as raw material for the fertiliser industry, with PT Pupuk Indonesia slated to build the downstream industrial facilities. A portion of the gas will also be supplied to state-owned enterprises PLN and PGN, as well as several private companies, to increase added value and drive economic value creation in the region. The investment for the Masela Block gas project reaches US$20.9 billion, equivalent to approximately Rp390 trillion. The project is expected to produce 9.5 million tonnes of LNG per year, or 1,200 million standard cubic feet per day, along with 35,000 barrels of condensate per day. The Abadi Field in the Masela Block is Indonesia’s largest deep-sea gas reserve, located approximately 160 kilometres off the coast of Yamdena Island in the Arafura Sea at depths of 400 to 800 metres. The Masela Production Sharing Contract, originally signed in 1998 and extended until 2055, has the potential to produce 9.5 million metric tonnes per annum of LNG and 150 million standard cubic feet per day of pipeline gas, alongside an estimated condensate production of 35,000 barrels per day.