$21 billion Asian LNG project enters construction phase with groundbreaking ceremony

July 16, 2026, by Melisa Cavcic

A groundbreaking ceremony has kicked off construction of a multibillion-dollar liquefied natural gas (LNG) project, operated by Inpex Masela, a subsidiary of Japan’s Inpex, in Indonesia’s Masela block, Asia.

Abadi LNG development concept; Source: Inpex

The groundbreaking ceremony for the Abadi LNG project, designed to produce up to 9.5 million tons of LNG per year (mtpa), was disclosed on July 16, 2026, with the Indonesian government’s announcement published through the state news agency ANTARA, which frequently distributes official government statements.

According to the news agency’s reporting, the investment for this LNG project has reached approximately $21 billion, based on a statement from Bahlil Lahadalia, Indonesia’s Minister of Energy and Mineral Resources (ESDM).

During his speech at the groundbreaking ceremony for the National Strategic Project (PSN), Bahlil reportedly said that the total estimated investment amount encompasses an additional $1 billion dedicated exclusively to carbon capture and storage (CCS) technology.

Inpex Masela is the operator of the Abadi LNG project with a 65% interest, while its partners are Pertamina (20%) and Petronas (15%), following Shell’s exit in 2023. The production sharing contract (PSC) is valid until November 15, 2055.

With a production capacity of around 150 million cubic feet of natural gas per day, the Abadi project’s condensate production is estimated to reach up to 35,000 barrels per day.

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Located in the Arafura Sea, off Maluku Province in eastern Indonesia, the gas field lies in waters about 750 kilometers south of Ambon and 170–180 kilometers southwest of the Tanimbar Islands Regency, near the Indonesia-Australia maritime border.

Indonesia’s state news agency has reported that the country’s government put strict distribution quotas in place for the field’s output, with at least 60% of the gas earmarked for domestic demand, leaving up to 40% for export.

The Asian nation believes that this LNG project will be crucial in bolstering its energy security with a cleaner, more sustainable energy supply, as it will employ CCS technology, advancing the country’s energy transition agenda.

According to Inpex, the introduction of CCS will neutralize the CO2 emitted from natural gas production at the Abadi gas field. The operator intends to market the LNG not only to buyers in Indonesia where demand is expected to grow, but also to those in East Asia, Southeast Asia, South Asia and elsewhere.