Masela and Indonesia’s New LNG Chapter: From Gas Supply to the FSRU Network
- 7 days ago
- 5 min read
Masela Expands Indonesia’s LNG Supply
The Abadi LNG Project in the Masela Block is one of Indonesia’s largest gas developments. Located in the Tanimbar Islands, Maluku, the project is operated by INPEX in partnership with Pertamina and PETRONAS. It is designed to produce approximately 9.5 million tonnes of LNG per year, 150 MMSCFD of pipeline gas, and up to 35,000 barrels of condensate per day.
For comparison, Masela’s planned LNG capacity is equivalent to approximately 12% of QatarEnergy LNG’s installed capacity of 77 million tonnes per year across 14 LNG production trains in Ras Laffan. This scale positions Masela as a significant source of supply, although large production capacity alone does not guarantee that all of its gas will be absorbed by the market.
Geographically, Masela is located far from many of Indonesia’s major demand centres in Java, Sumatra, and Bali. Its development therefore requires more than production facilities. It also needs committed buyers, LNG carriers, receiving terminals, regasification facilities, and distribution networks that can connect the supply with end users.
From the Abadi Field to End Users
Gas from the Abadi Field will be produced through a subsea production system, handled by offshore facilities, and transported through pipelines to an onshore LNG plant. At the plant, the gas will be processed and cooled until it becomes LNG. Liquefaction significantly reduces its volume, making it more efficient to transport using LNG carriers.
Once the LNG reaches its destination, it must be stored and converted back into gaseous form through regasification. The gas can then be delivered through pipelines to power plants, industrial estates, and other customers. Within this value chain, Masela sits at the production end, while a Floating Storage and Regasification Unit, or FSRU, serves as the receiving facility responsible for storing LNG, regasifying it, and delivering the resulting gas to the market.
Masela’s marketing direction is beginning to take shape through preliminary agreements between INPEX and prospective LNG buyers, including bp, Perusahaan Gas Negara (PGN), PLN Energi Primer Indonesia (EPI), and Shell Eastern Trading. The agreement with Pupuk Indonesia is different, as it concerns pipeline gas rather than LNG. These preliminary agreements are still progressing towards long-term commercial contracts.
The Indonesian government has also allocated at least 60% of Masela’s gas production to the domestic market, including the fertilizer, power-generation, and downstream-processing industries, while exports are capped at 40%. This policy reinforces the need for domestic receiving and distribution infrastructure.
FSRUs Connect LNG Supply with the Market
Indonesia already operates several FSRUs with different capacities and functions. Nusantara Regas Satu in Jakarta Bay began operations in 2012 and has a regasification capacity of 500 MMSCFD. Its gas is delivered through the Muara Karang Onshore Receiving Facility to the Muara Karang, Tanjung Priok, and Muara Tawar power plants, as well as to the West Java gas network.
The Lampung FSRU has been operated by PGN LNG since July 2014 and is located approximately 21 kilometres offshore from Labuhan Maringgai. The facility has an annual LNG handling capacity of around 1.5–2 million tonnes and can deliver up to 250 MMSCFD of gas through PGN’s network.
The Jawa Satu FSRU forms part of an integrated gas-fired power project. With a storage capacity of 170,000 cubic metres and a regasification capacity of 300 MMSCFD, it supplies gas to the 1,760 MW Jawa 1 combined-cycle power plant. Meanwhile, Karunia Dewata in Benoa has a storage capacity of 26,000 cubic metres and can supply up to 50 MMSCFD to the Pesanggaran gas-fired power plant.
These differences show that FSRU capacity must be tailored to the scale of each market. Some facilities serve regional gas networks, while others are developed specifically for a single power-generation complex.
High Investment, Limited Listed-Market Exposure
FSRUs require substantial investment. Industry benchmarks in 2025 placed the cost of a newly built FSRU at approximately US$ 300–400 million, while converting an LNG carrier into an FSRU generally costs around US$ 200 million. These estimates typically reflect only the cost of the vessel, while the total cost of an FSRU terminal can be higher after including the mooring system, jetty, subsea pipelines, and onshore receiving facilities.
On the Indonesia Stock Exchange, exposure to operating FSRUs can be found in at least PT Perusahaan Gas Negara Tbk. (PGAS) and PT GTS Internasional Tbk. (GTSI). Through PGN LNG, PGAS operates the Lampung FSRU and owns a 40% interest in PT Nusantara Regas.
Meanwhile, through PT Permata Khatulistiwa Regas, GTSI holds a 25% interest in PT Jawa Satu Regas, the entity that owns and operates the Jawa Satu FSRU. PT Humpuss Maritim Internasional Tbk. (HUMI) also has indirect exposure as GTSI’s parent company.
Receiving Infrastructure Must Be Expanded
PLN EPI expects its LNG demand to increase from approximately 6.2 million tonnes in 2026 to more than 10 million tonnes by 2030. To support this growth, the company plans to develop around 13 FSRUs and nearly 50 onshore regasification units across 56 locations in Indonesia.
This infrastructure is needed because not all power plants and industrial areas are connected to the main gas pipeline network. However, not every region requires a large FSRU. Areas with lower demand can be served by small-scale LNG carriers, ISO tanks, or onshore regasification facilities. Under a hub-and-spoke model, a main terminal receives LNG in large volumes before redistributing it in smaller quantities.
Masela and FSRUs Form an Integrated Ecosystem
Additional output from Masela could provide Indonesia with a long-term source of LNG supply for power plants and industrial users, while also creating opportunities for exports and foreign-exchange earnings. However, these benefits will depend on the readiness of FSRUs, regasification facilities, LNG carriers, and pipeline networks that connect the gas supply with end users.
The project’s impact also extends beyond the upstream oil and gas sector. Masela is expected to employ more than 12,000 workers at the peak of its construction phase, with some positions prioritized for workers from Maluku and the Tanimbar Islands. Its development could also support local industries, logistics services, micro, small, and medium-sized enterprises, infrastructure development, and technology transfer in the surrounding region.
If the entire LNG value chain develops in an integrated manner, Masela could strengthen Indonesia’s energy security and become a catalyst for the growth of the country’s gas industry from upstream to downstream. Given its production scale and broader economic impact, Masela has the potential to become a game changer for Indonesia’s LNG industry.
So, what do you think, Sobat KAF: which sector will feel the greatest impact—power generation, industry, shipping, or gas infrastructure?
Let’s discuss in the comments!
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