Indonesia to prioritize domestic market for Abadi Masela gas supply

Tanimbar, Maluku (ANTARA) - The Indonesian government will allocate the majority share of natural gas from the Abadi Masela LNG project to fuel the domestic economy, Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia announced.

“At least 60 percent of the gas will be used to meet domestic needs, and a maximum of 40 percent will be exported,” Bahlil said during the project’s groundbreaking ceremony in Tanimbar Islands Regency, Maluku, on Thursday.

To secure this domestic supply, three major state-owned enterprises (SOEs)—national electricity firm PLN, state gas company PGN and fertilizer producer Pupuk Indonesia—have signed a Heads of Agreement (HoA) as primary off-takers.

Bahlil stated that a portion of the domestic gas allocation will power a new fertilizer and blue ammonia factory in Maluku, developed by PT Pupuk Indonesia. The initiative aims to stimulate a multiplier effect and establish Maluku as a new economic growth hub.

Beyond agriculture, the remaining domestic gas quotas will flow to PLN for power generation, PGN for grid distribution and select private enterprises.

For the 40 percent earmarked for international markets, Bahlil indicated that Japan stands at the front of the line, recognizing the major financial backing of Japanese energy firm INPEX.

“Our priority is Japan, Inpex's first choice. After all, we are partners,” he noted.

While exact export pricing remains under negotiation using the Indonesian Crude Price (ICP) formula, Bahlil revealed that domestic gas supplied for fertilizer manufacturing will be heavily subsidized, targeting a range of US$6 to US$7 per MMBTU.

The minister emphasized that lower raw material prices are an acceptable trade-off if the manufacturing and subsequent economic value addition remain within Indonesian borders.

The Abadi Masela LNG Project is designed to produce 9.5 million tons of LNG per year, 150 million cubic feet of natural gas per day and up to 35,000 barrels of condensate per day.

The project is expected to create approximately 12,000 jobs during its construction phase alone, accelerating economic development across Eastern Indonesia.

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Translator: Putu Indah Savitri, Yashinta Difa

Editor: Azis Kurmala

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