Masela Block: A Strategic Leap Forward for Indonesia's Energy, Economy, and Decarbonization

How can Indonesia meet its growing energy needs while maintaining its commitment to decarbonization?

The answer to this question can be found when we look to the east of the country, where the massive Abadi LNG project in the Masela Block is being prepared. This project is not merely the construction of gas facilities, but a massive strategic step that bridges three main agendas: strengthening national energy security, supporting decarbonization efforts, and accelerating development in eastern Indonesia. Thus, Indonesia is entering an important phase in energy management, where growing energy needs can be met while aligning with global commitments to reduce carbon emissions.

Latest Developments & Strategic Leaps

In December 2023, the Indonesian government officially approved the Revision of Plan of Development II (POD II) for the Masela Abadi LNG project. Unlike conventional gas projects, Masela incorporated Carbon Capture and Storage (CCS) technology from the initial design stage, rather than as an afterthought. This decision positions Masela as one of the pioneers in Southeast Asia in the application of integrated carbon emission control solutions in large-scale gas facilities.

With a targeted production capacity of around 9.5 million tons of LNG per year and a pipeline gas supply of 150 million standard cubic feet per day (MMSCFD), the Masela Block is projected to be not only an export engine but also a pillar of domestic energy needs. The gas produced will be used for domestic industry while strengthening national energy security.

The choice of location for the onshore facility in Saumlaki, Tanimbar Islands, is also significant. The presence of this giant project has the potential to accelerate infrastructure development in Maluku, a region that has been relatively underdeveloped. The construction of ports, transportation networks, and basic utilities will be part of the expected ripple effect. Not only that, the Masela consortium is also expected to be a magnet for the growth of local supporting industries, ranging from logistics, labor, to technical services, which will ultimately strengthen economic and social connectivity in eastern Indonesia.

Since August 2025, this project has entered the Front-End Engineering Design (FEED) stage. This process is divided into several main areas, namely the construction of Onshore LNG (OLNG) in Saumlaki, subsea networks (Subsea Umbilicals, Risers, and Flowlines/SURF), and Floating Production Storage and Offloading (FPSO) facilities. With the target of full operation before 2030, Masela is seen as a strategic momentum that can accelerate energy investment flows while driving economic transformation in the eastern region.

New Partnership Structure & Global Trends

In mid-2023, the ownership map of the Masela Block underwent a major shift. INPEX retained control with a 65% stake as the main operator. However, Shell decided to withdraw after years of delaying its investment commitment. Shell's 35% stake was officially transferred to Pertamina Hulu Energi (20%) and Petronas Masela (15%) with a transaction value of up to US$650 million. This agreement was finalized through a Sale and Purchase Agreement (SPA) in July 2023, with part of the payment directly linked to the achievement of the Final Investment Decision (FID).

The entry of Pertamina and Petronas as Shell's replacements is not merely a change of partners. Behind it lies a new direction in the energy investment landscape of Indonesia and Southeast Asia. Whereas previously, giant projects often depended on the presence of Western supermajors, now it is national and regional companies that are emerging as the main drivers. This shift can be interpreted as an effort to strengthen energy independence, while also promoting a model of cooperation between state-owned enterprises/national oil companies that is more suited to the regional context.

The new consortium structure offers several strategic advantages. First, political and market risks can be mitigated because decisions are closer to domestic and regional needs. Second, opportunities for technology transfer—particularly related to Carbon Capture and Storage/Carbon Capture, Utilization, and Storage (CCS/CCUS)—are more open, given that this technology has been included in the initial project design, rather than as an afterthought. This is how Masela can become an important laboratory for the development of carbon mitigation technology in Southeast Asia, while also confirming that giant energy projects are no longer just about gas production, but also about a new direction towards energy transition.

Economic Impact & Social Transformation

With an investment value of around US$20-21 billion, the Abadi LNG project in the Masela Block is one of the major milestones in the history of energy investment in Indonesia and has been designated as a National Strategic Project. Studies by LPEM UI and Pattimura University estimate that this project will make a significant contribution to the economy, namely an additional US$153 billion to the national GDP and an increase in household income of up to US$33.5 billion throughout its operation. The upstream and downstream activities of this project are also predicted to drive GDP growth of around 1.3% and create around 73,000 jobs, both directly in the oil and gas, construction, and manufacturing sectors, as well as indirectly in supporting services such as transportation, hospitality, banking, agriculture, and forestry.

The construction of an onshore LNG refinery in Saumlaki will have a multiplier effect on the economy of Maluku and eastern Indonesia. Its presence is believed to reduce logistics costs, accelerate the development of transportation infrastructure, and give rise to new centers of economic growth, similar to the development of industrial areas around Arun (Aceh) and Bontang (East Kalimantan). Furthermore, this project is seen as a driver of economic transformation in the eastern region by encouraging gas-based downstreaming, petrochemical industrialization, and increasing the capacity of the local workforce through the involvement of national vendors and workers. President Jokowi is even optimistic that the downstream industry from this project can absorb hundreds of thousands of workers if petrochemicals develop optimally.

The Role of CCUS & Decarbonization

The Abadi LNG project in the Masela Block marks a new milestone in Indonesia's energy history. For the first time, carbon capture and storage (CCUS) technology has been integrated from the initial planning stage, rather than as an afterthought. This step signals Indonesia's seriousness in implementing cleaner energy practices, while also demonstrating that natural gas development can still be pursued in line with the 2060 Net Zero Emission commitment. According to SKK Migas, the CO₂ storage capacity of this project is estimated to reach up to 3 gigatons, making it one of the largest decarbonization initiatives in the region.

The decision to place CCUS at the heart of the project design did not come out of nowhere. The government has prepared a supportive regulatory framework, such as ESDM Regulation No. 2/2023 for the upstream oil and gas sector and Presidential Regulation No. 14/2024, which reinforces the legal umbrella for CCUS development. With this foundation, the Abadi LNG project is not just a fossil fuel project, but a transition model that attempts to combine energy needs with sustainability demands. It shows that fossil resources can still be utilized more responsibly if supported by appropriate technology.

Furthermore, CCUS does not stop at simply reducing emissions. This technology opens up opportunities for the formation of new value chains around carbon, from CO₂ transportation through pipelines and ships, storage in geological formations, to reuse for building materials, chemicals, or plastics. In this way, Abadi LNG is not only a gas project, but also a gateway to a carbon-based circular economy. The presence of CCUS makes the Masela Block a symbol that decarbonization does not always mean abandoning fossil fuels, but rather managing them in a smarter and more sustainable way.

Relevance for Geni Energi

Experience in engineering advisory and sustainability provides Geni Energi with opportunities to contribute to various important aspects, such as feasibility studies and front-end engineering for Carbon Capture and Storage (CCS) projects, carbon assessment, and Life Cycle Assessment (LCA). Additionally, this expertise can be applied in socio-economic planning and local community empowerment, as well as design optimization to improve energy efficiency and reduce emissions. This approach enables Geni Energi to offer a holistic perspective that integrates energy supply security, emissions reduction, and socio-economic benefits in a balanced manner.