Minister Bahlil Prioritises Masela Gas for Domestic Needs

Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia has stated that gas produced by the Abadi LNG project in the Masela Working Area will be prioritised for domestic needs. “Later, a minimum of 60 per cent of the gas will be used to meet domestic requirements, and a maximum of 40 per cent will be for export,” Bahlil said during the Groundbreaking of the Abadi Masela LNG National Strategic Project in the Tanimbar Islands Regency, Maluku, on Thursday. Three state-owned enterprises—PLN, PGN, and Pupuk Indonesia—have signed a Heads of Agreement as prospective domestic offtakers. Bahlil noted that a portion of the gas produced will be used for the construction of a fertiliser and blue ammonia plant in Maluku by PT Pupuk Indonesia. The aim of establishing the fertiliser industry in Maluku is to create a new economic growth centre and generate a multiplier effect from the presence of the Masela LNG project. In addition to the fertiliser and blue ammonia plant, Bahlil conveyed that gas from the Masela project will also be supplied to PLN, PGN, and several private companies. “This is also to increase added value in order to encourage the creation of economic value in the region,” Bahlil said. Furthermore, Bahlil has allocated 40 per cent of Masela’s gas for export, with Japan being one of the primary destination countries. “Especially Japan, because they are investing. So, our priority for Inpex’s first choice of country is Japan. Moreover, we are partners,” Bahlil said. Regarding the gas price, he stated that negotiations are still ongoing. However, for fertiliser, he indicated the price would be in the range of 6–7 US dollars per MMBTU. “The LNG will use the Indonesian Crude Price (ICP) formulation. But what I want is for the raw material processing to happen here, so even if the value is low, the added value will be generated here,” Bahlil said. The Abadi LNG project is planned to produce up to 9.5 million tonnes of LNG per year, along with condensate of up to 35,000 barrels per day and natural gas of approximately 150 million cubic feet per day. The project is also expected to provide added value to the economy through long-term investment, accelerate development in the eastern Indonesia region, and create employment and business opportunities for the community. “This project creates jobs, absorbing around 12,000 workers during the construction period. This is during construction, yes,” Bahlil said.