Inpex-led $21 billion Abadi LNG project begins construction in Indonesia
Construction has begun on Indonesia’s $21 billion Abadi liquefied natural gas project, a move that secures long-term energy supplies for Asia while integrating large-scale carbon capture into fossil fuel extraction.
Construction officially began on July 16, 2026, for the Abadi liquefied natural gas project in eastern Indonesia. The $21 billion development is operated by Inpex Masela, a subsidiary of Japan’s Inpex, and targets a production capacity of 9.5 million tons per year.
Inpex Masela holds a 65 percent interest in the venture. Indonesian state energy company Pertamina owns 20 percent, and Malaysia’s Petronas holds the remaining 15 percent following Shell’s departure from the consortium in 2023. The underlying production sharing contract runs through November 15, 2055.
Indonesia’s Minister of Energy and Mineral Resources, Bahlil Lahadalia, confirmed the total investment figure includes a dedicated $1 billion allocation for carbon capture and storage technology. Inpex stated this integration is designed to neutralize carbon dioxide emissions generated during natural gas production at the Masela block.
The facility is projected to process approximately 150 million cubic feet of natural gas daily, alongside condensate output reaching 35,000 barrels per day. The Indonesian government has mandated strict distribution quotas for the field, reserving at least 60 percent of the gas for domestic consumption and capping exports at 40 percent.
This domestic reservation policy reflects Jakarta’s priority to stabilize local energy markets and support its national energy transition agenda. By embedding carbon capture into the project’s core infrastructure, the consortium aims to future-proof the asset against tightening environmental regulations while marketing the output as a cleaner transitional fuel.
Despite the heavy domestic allocation, the remaining export volume represents a meaningful addition to regional supply chains. Inpex intends to direct these exports to buyers across East Asia, Southeast Asia, and South Asia, where demand for reliable baseload power continues to expand.
The Abadi field is situated in the Arafura Sea, roughly 750 kilometers south of Ambon and near the maritime border with Australia. Its development marks a major capital commitment in a region increasingly scrutinized for both energy security and environmental impact.
