Tanimbar Islands, Maluku. Indonesia on Thursday officially revived the long-delayed Masela LNG project, marking a major milestone for one of the country's largest energy investments after nearly three decades of delays.

The $21 billion project is designed to produce 9.5 million metric tons of liquefied natural gas (LNG) annually, along with up to 35,000 barrels of condensate per day and 150 million cubic feet of natural gas per day.

Speaking at the groundbreaking ceremony in the Tanimbar Islands, Energy Minister Bahlil Lahadalia said at least 60% of the gas output would be allocated to the domestic market, with the remainder exported.

He said the project would strengthen Indonesia's energy security by expanding supplies of cleaner energy, attracting long-term investment, accelerating economic development in eastern Indonesia, and creating jobs and business opportunities.

“The project will employ around 12,000 workers during the construction phase alone,” Bahlil said.

The investment also includes $1 billion for carbon capture and storage (CCS) technology to reduce emissions from the project.

The offshore Masela block lies in the Arafura Sea, about 750 kilometers south of Ambon, near Australia's maritime boundary, although the entire concession is located within Indonesian waters.

President Prabowo Subianto, addressing the ceremony via video link from Jakarta, described Masela as a strategic national project that should face no further delays.

“We have waited almost three decades for this project. Today, we are finally beginning construction,” Prabowo said.

“Development must not be delayed again. It should be completed as quickly as possible.”

The Masela block is operated by Inpex Masela Ltd, which holds a 65% participating interest. The remaining 35% is jointly owned by Pertamina and Petronas following their acquisition of Shell's stake in 2023.

Originally awarded in 1998 under a 30-year production-sharing contract, the concession was later extended by 20 years after repeated delays in project development.

According to a study by the Institute for Economic and Social Research (LPEM) at the University of Indonesia, the project could contribute about $137.7 billion to Indonesia's gross domestic product between its startup and 2055.

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