Japanese Energy Giant Seeks Incentives for Rp352 Trillion LNG Project in Indonesia
Jakarta – Inpex Masela Ltd has requested support from the Indonesian Government for the implementation of the development of the LNG Refinery project at Masela Block, Maluku. Such support includes matters relating to the Engineering, Procurement, Construction and Installation (EPCI) work phases.
Project Director Inpex Masela Ltd Jarrad Blinco outlined that the project, valued at nearly US$21 billion or approximately Rp352 trillion, is demonstrating quite significant progress. With strong support from SKK Migas, a number of important phases have been successfully achieved, including approval of the Environmental Impact Analysis (AMDAL).
“Field work is expected to commence shortly after the completion of compensation to local communities,” he stated during a Coordination Meeting on the Onshore LNG Abadi Masela National Strategic Project at the Ministry of Finance on Wednesday (25 February 2026).
He also noted that the Front End Engineering Design (FEED) phase and related activities are currently proceeding well. The results of FEED are currently targeted to be obtained by June 2026.
Moving into the EPCI phase, Inpex believes government support is required to facilitate project implementation. Several matters Inpex is seeking include:
Relaxation of Local Component Content (TKDN) requirements
Use of foreign fabrication yards
Simplification of import procedures
Simplification of Master List and cabotage policy
Reduction of obligations to use certain goods
Additionally, the company has also requested coordination with the Ministry of Finance regarding financing schemes through the Trustee Borrowing Scheme.
Beyond this, Inpex has also emphasised the importance of government support to facilitate administrative licensing and ensure community acceptance of the project.
“We hope for further cooperation and support for this project,” he stated.
The Abadi field in Masela Block is a deepwater gas field with Indonesia’s largest gas reserves, located approximately 160 kilometres offshore Yamdena Island in the Arafura Sea at depths of 400–800 metres. The potential gas reserves from the Abadi field are estimated at 6.97 trillion cubic feet (TCF).
The Production Sharing Contract (PSC) for Masela Block, signed in 1998 and extended until 2055, has the potential to produce 9.5 million tonnes per year (MTPA) of LNG and 150 million standard cubic feet per day (MMSCFD) of pipeline gas. Additionally, the Abadi field is estimated to generate condensate production of 35,000 barrels per day.
The greenfield development concept, characterised by high complexity and substantial risk, encompasses deepwater drilling, subsea facilities, Floating Production Storage and Offloading (FPSO), and onshore LNG plant, which will present both challenges and significant opportunities for PHE and its partners to realise. Furthermore, development of this field also has the potential to absorb up to 10,000 workers.
Participating Interest Holder Structure
Inpex Masela Ltd is the operator and largest participating interest (PI) holder in Masela Block, reaching 65%.
Previously, Inpex was accompanied by Shell Upstream Overseas Services with a 35% stake. However, Shell decided to exit from the eternal gas project located in Maluku.
The 35% Shell stake has, since July 2023, been taken over by PT Pertamina Hulu Energi through its subsidiary PT Pertamina Hulu Energi Masela (PHE Masela) at 20% and Petronas at 15%.
The agreement to transfer participating rights from Shell to Pertamina and Petronas was signed on 25 July 2023, and approval from the Energy and Mineral Resources Minister for the PI transfer was obtained on 4 October 2023.
The Abadi field in Masela Block is a deepwater gas field with Indonesia’s largest gas reserves, located approximately 160 kilometres offshore Yamdena Island in the Arafura Sea at depths of 400–800 metres. The potential gas reserves from the Abadi field are estimated at 6.97 trillion cubic feet (TCF).
Following the Production Sharing Contract signature in 1998, Inpex discovered giant gas reserves in Masela Block in 2000.
Nineteen years later, the Indonesian Government granted approval for the first Plan of Development (PoD-I) to Inpex to produce 9.5 million tonnes of LNG per year (MTPA) from the Masela LNG Refinery, and to produce 150 million standard cubic feet per day (MMSCFD) of pipeline gas, as well as 35,000 barrels per day (bpd) of condensate.
The greenfield development concept, characterised by high complexity and substantial risk, encompasses deepwater drilling, subsea facilities, Floating Production Storage and Offloading (FPSO), and onshore LNG plant, which will present both challenges and significant opportunities for PHE and its partners to realise. Furthermore, development of this field also has the potential to absorb up to 10,000 workers.
Masela Block is also planned to produce clean energy through the application of Carbon Capture and Storage (CCS) technology to support the Government’s programme in reducing carbon emissions and supporting sustainability in the energy transition era.
Implementation of CCS was approved by the Indonesian Government on 28 November 2023, through Revision 2 of PoD-I. Subsequently, a FEED tender was conducted. Finally, on Wednesday, 9 April 2025, Inpex launched this OLNG FEED.
Key milestones of the Abadi Gas Field Project, Masela Block:
1998: Production Sharing Contract (PSC) signed by Inpex
2000: Discovery of giant gas reserves in Masela Block
2019: Approval of the First Development Plan (PoD-I) by the Indonesian Government to produce 9.5 million tonnes of LNG per year, 150 MMSCFD natural gas, and 35,000 bpd condensate
2023: Shell exits; Pertamina and Petronas enter as participating interest holders