en.Wedoany.com Reported - Japan's Inpex has officially broken ground on the Abadi liquefied natural gas (LNG) project in Indonesia on July 16, 2026, although a final investment decision (FID) for the project has not yet been reached.

According to a statement from the Indonesian Cabinet Secretariat, President Prabowo Subianto inaugurated the groundbreaking ceremony for the Abadi Masela LNG project on July 16. The event was held simultaneously via hybrid video conference at the Merdeka Palace in Jakarta and at the project site in the Tanimbar Islands Regency, Maluku Province.

The statement indicates that the Abadi Masela LNG project involves an investment of approximately $20.9 billion, with an annual production capacity of 9.5 million tons of LNG, of which 60% will be prioritized to meet domestic demand. The project is expected to commence production in 2029-2030. Inpex previously stated that it expects to make a final investment decision (FID) in 2027, with production starting in the early 2030s. An Inpex spokesperson said that actual construction work will begin after the FID.

The project has achieved several key milestones in its progress. In February of this year, Inpex obtained environmental approval from the Indonesian government for the Abadi LNG project. Subsequently, in May, Inpex reached preliminary agreements with energy giants BP and Shell, as well as PT Perusahaan Gas Negara (PGN), a subsidiary of Indonesia's state-owned oil and gas company Pertamina, and Indonesia's state electricity company PLN, for LNG procurement. Additionally, Inpex reached an agreement in principle with fertilizer producer Pupuk Indonesia for pipeline gas supply. Inpex stated that it will work with potential customers to finalize sales and purchase agreements (SPAs), which are expected to cover a "significant portion" of the project's anticipated LNG output.

Inpex President and CEO Takayuki Ueda said in February that the front-end engineering and design (FEED) work for the Abadi LNG project is expected to be completed by the end of this year. Based on detailed cost estimates calculated from the FEED deliverables expected by the end of 2026, Inpex will review and validate the validity of EPC bid proposals.

In terms of equity structure, Inpex Masela, a subsidiary of Inpex, holds a 65% operating interest in the Abadi project, with Pertamina holding 20% and Malaysia's Petronas holding 15%. Previously, Shell completed the sale of its 35% interest in the Masela Production Sharing Contract (Masela PSC) in October 2023, with the buyers being Pertamina Hulu Energi and Petronas Masela.