Finance Minister Seeks Competitive Gas Pricing for Masela Block to Benefit Domestic Industry

Jakarta – Finance Minister and Deputy Chair of the Government’s Strategic Programme Acceleration Task Force (Satgas Debottlenecking) Purbaya Yudhi Sadewa has instructed that the price of gas produced by Inpex Masela Ltd at the Masela Block project in Maluku should be more competitive, particularly for domestic industrial gas-consuming sectors.

Purbaya assessed that the piped gas price for the Masela Block in the Plan of Development (PoD) at approximately USD 6.8 per MMBTU is already reasonably good. However, industries could potentially obtain gas at higher prices than this figure, particularly if receiving liquefied natural gas (LNG).

For this reason, he requested that SKK Migas ensure that gas infrastructure providers such as PT Perusahaan Gas Negara (PGN) do not apply excessive mark-ups when supplying gas to industry.

“But if it goes to PGN, there’s a risk it gets marked up again, reaching the market at USD 12–13 per MMBTU. Could we not look into developing a better scheme going forward, so that domestic industries can enjoy more competitive pricing? That’s what SKK needs to think about,” Purbaya said during a National Strategic Project Coordination Meeting for the Onshore LNG Abadi Masela at the Ministry of Finance on Tuesday (24 February 2026).

Regarding LNG pricing for the Masela Block, Purbaya also requested that the price be controlled at around USD 9 per MMBTU. In the Plan of Development (PoD), LNG from the Masela Block is set at approximately 13.5% of Indonesia’s crude oil price (ICP).

“If it goes through PGN before reaching industry, PGN can take a large margin. Could we not control it so that it reaches, say, USD 9, at a certain percentage of crude oil price, to industry?” he said.

SKK Migas Chief Djoko Siswanto stated that in the Masela Block’s Plan of Development (PoD), piped gas from the Masela Block is estimated at USD 6.8 per MMBTU. For LNG, he noted that LNG will be allocated 40% for the domestic market and 60% for the export market. LNG selling prices, based on the PoD, are set at 13.5% of Indonesia’s crude oil price (ICP).

For domestic gas buyers, Inpex has already signed initial Heads of Agreement (HoA) with several companies, including PT PLN (Persero), PT PGN Tbk, and PT Pupuk Indonesia. However, these HoA agreements remain non-binding.

“For Pupuk, PLN, and PGN, we already had HoA last year, but non-binding agreements. So it’s been a year now, and we hope this year we can get to Gas Purchase Agreements (PJBG). Regarding price, in the PoD we have USD 6.8 per MMBTU for piped gas,” he said.

The Abadi Field in the Masela Block is Indonesia’s largest offshore deepwater gas field, located approximately 160 kilometres off the coast of Yamdena Island in the Arafura Sea at depths of 400–800 metres. The Abadi Field’s estimated gas reserves total 6.97 trillion cubic feet (TCF).

The Production Sharing Contract (PSC) for Masela, signed by Inpex Masela Ltd in 1998 and extended until 2055, has the potential to produce 9.5 million metric tonnes per annum (MMTPA) of LNG and 150 million standard cubic feet per day (MMSCFD) of piped gas. Additionally, the Abadi Field is estimated to produce condensate at 35,000 barrels per day.

The greenfield development concept, which involves high complexity and significant risk including deepwater drilling, subsea facilities, Floating Production Storage and Offloading (FPSO), and an onshore LNG plant, will present both challenges and significant opportunities for PHE Masela and its partners in realising the project. The field development is also expected to absorb up to 10,000 workers.

The Masela Block is also planned to produce clean LNG through the application of Carbon Capture and Storage (CCS) technology to support the Government’s programme to reduce carbon emissions and promote sustainability during the energy transition era.

Ownership Structure

Inpex Masela Ltd is the operator and largest participating interest holder in the Masela Block, holding 65%.

Previously, Inpex was accompanied by Shell Upstream Overseas Services with a 35% stake. However, Shell decided to exit the perpetual gas project located in Maluku.

The 35% Shell stake has been taken over since July 2023 by PT Pertamina Hulu Energi through its subsidiary PT Pertamina Hulu Energi Masela (PHE Masela) with 20% and Petronas with 15%.

The agreement to transfer participating interest from Shell to Pertamina and Petronas was signed on 25 July 2023, with the Ministry of Energy and Mineral Resources’ approval of the PI transfer obtained on 4 October 2023.

Since the production sharing contract was signed in 1998, Inpex discovered the giant gas reserves in the Masela Block in 2000. After 19 years, the Indonesian Government approved the first Plan of Development (PoD-I) for Inpex to produce 9.5 million tonnes of LNG per year (MTPA) from the Masela LNG refinery, produce 150 million standard cubic feet per day (MMSCFD) of piped gas, and 35,000 barrels per day (bpd) of condensate.

The greenfield development concept, which involves high complexity and significant risk including deepwater drilling, subsea facilities, Floating Production Storage and Offloading (FPSO), and an onshore LNG plant, will present both challenges and significant opportunities for PHE Masela and its partners.