OPINION : “Lessons in Gas and LNG Governance: ‘Liberating Masela’"

From Groundbreaking to First LNG: Freeing the Abadi Project from the Constraints of Long-Lead Items

On August 17, 1945, the Indonesian people proclaimed their independence. However, history teaches us that the proclamation was not the end of the struggle. Bung Karno and Bung Hatta had declared Indonesia's independence to the world, but the nation still had to fight to defend its sovereignty, establish a government, rebuild its economy, confront military aggression, and prepare everything necessary to turn the aspirations of independence into reality.

Independence does not end with a proclamation. It only becomes meaningful when it is realized in practice.

As Indonesia approaches the 81st anniversary of its independence on August 17, 2026, this analogy feels particularly relevant when discussing the development of the Abadi Gas Field in the Masela Block.

The project's groundbreaking can be likened to a "Proclamation of Masela's Independence." It represents a declaration that, after a very long journey, Indonesia is finally determined to develop one of its largest gas reserves.

However, just as the Proclamation of Independence on August 17, 1945, was not enough on its own, groundbreaking alone is certainly not sufficient.

Masela is not yet truly "independent."

Many challenges still need to be resolved before gas from beneath the Arafura Sea can actually flow, be processed, and ultimately deliver benefits to Indonesia.

The Final Investment Decision (FID) remains a critical milestone that must be completed. After that, the project must still undergo engineering, procurement, construction, and commissioning before eventually achieving first gas and first LNG.

Among these various challenges, there is one issue that may not receive much public attention but could ultimately determine when Masela actually begins production.

It is called Long-Lead Items (LLIs): materials or equipment that require a considerable amount of time between ordering and delivery to the project site.

If we want to accelerate gas production from the Masela Block, the project must be "liberated" from the constraints of Long-Lead Items as soon as possible.

Can it be done?

FID Is Not the Finish Line

In large-scale LNG projects, the Final Investment Decision is not the finish line. Rather, FID is the starting gun in a race against time.

Once the investment decision has been made, the project enters a phase that is critical to its success: securing major equipment that requires exceptionally long periods for design, fabrication, and delivery.

This is where many of the world's giant LNG projects encounter difficulties.

A delay in the delivery of a single critical piece of equipment can shift the commissioning schedule of an entire facility, ultimately delaying production and increasing investment costs. This is particularly relevant to Abadi LNG.

Until now, public attention surrounding Masela has largely focused on permitting, financing, Front-End Engineering Design (FEED), commercial arrangements, the development of onshore facilities, and negotiations with prospective LNG buyers.

Yet even after these issues are resolved, Masela must still face an entirely different competition: securing a share of the world's manufacturing capacity. Masela is not the only LNG project under development.

Across the world, LNG, petrochemical, and CCS projects worth tens of billions of dollars are competing for the same equipment from a very limited number of suppliers.

This is where the next struggle begins.

MCHE: The "Heart" of an LNG Plant

One of the most critical LLIs is the Main Cryogenic Heat Exchanger (MCHE). If we compare an LNG plant to the human body, the MCHE is one of its "hearts."

This equipment enables natural gas to be cooled to approximately minus 162°C, transforming it from a gaseous state into a liquid and dramatically reducing its volume, making transportation by LNG carriers economically viable.

The problem is that a large-capacity MCHE is not something that can simply be purchased off the shelf.

Only a handful of world-class companies possess the technology and experience required to manufacture such equipment, including Air Products with its APCI technology and Linde.

Procurement lead times can reach approximately 24–36 months, potentially even longer when manufacturing capacity is fully booked.

The world is currently experiencing a period of highly aggressive LNG development.

Without an MCHE, no matter how large Masela's gas reserves may be, the LNG plant cannot produce LNG. The gas may be available. The plant may already have been constructed. But LNG production may still not be possible.

Compressors and Turbines: Critical Drivers That Cannot Wait

The next critical LLIs are refrigeration compressors and gas turbines. These components, manufactured by companies such as GE Vernova, Siemens Energy, and Mitsubishi Heavy Industries, are essential parts of LNG refrigeration systems.

Their procurement lead times can reach approximately 18–30 months. In project scheduling, these components typically lie on the critical path. This means that delays in their delivery have an almost immediate impact on the commissioning schedule.

An Engineering, Procurement, and Construction (EPC) project may complete structures, pipelines, jetties, utilities, and supporting facilities on schedule. However, if the main rotating equipment has not arrived, much of that infrastructure will effectively remain idle.

This is why the success of an LNG project is not determined solely by what happens at the construction site. Part of the project's fate is actually determined thousands of kilometers away, in workshops and manufacturing facilities around the world.

CCS: Introducing New Challenges for Masela

Masela faces an additional challenge that many previous generations of LNG projects did not encounter: Carbon Capture and Storage (CCS).

Integrating CCS is certainly a strategic step. The world increasingly demands energy with a lower carbon intensity. LNG produced with better CO₂ emissions management will hold an increasingly important position in future energy markets.

However, we must remember that every technological advancement comes with consequences. CCS systems require various specialized equipment, including CO₂ compressors, dehydration systems, injection equipment, wells, pipelines, and reservoir monitoring systems.

Some of these components require procurement lead times of approximately 24–36 months. Unlike conventional LNG equipment, whose designs and supply chains are relatively mature, large-scale CCS remains highly engineering-intensive.

Every project has different reservoir characteristics, gas compositions, injection pressures, and facility configurations. Consequently, its design, fabrication, testing, and commissioning processes involve greater uncertainty. For Masela, this creates a paradox.

CCS could become one of Abadi LNG's strategic strengths, but at the same time, it could also become one of the project's greatest sources of delay if not secured early.

Do Not Overlook Pipelines and LNG Storage Tanks

LLI challenges do not end with MCHEs, compressors, turbines, and CCS equipment. Masela also requires materials for subsea pipelines that will transport gas from offshore production facilities to onshore processing facilities.

Procurement of specialized pipeline materials can take approximately 12–24 months. Then there are full-containment LNG storage tanks. An LNG tank is not simply an ordinary storage tank.

It must be capable of storing LNG at cryogenic temperatures of approximately minus 162°C while meeting extremely strict safety standards.Construction and fabrication can take approximately 30–40 months. Consider the complexity involved. The MCHE is waiting for a manufacturing slot. Compressors are awaiting fabrication. Turbines are awaiting delivery. CCS systems must still undergo complex engineering processes. Subsea pipelines require specialized materials. Meanwhile, LNG storage tanks themselves take years to construct.

A delay in just one component can push back the entire sequence of subsequent activities.

The World Is Competing for Manufacturing Slots

This is the most serious challenge. Masela is not the only project seeking to procure equipment. Qatar is undertaking a major expansion of its North Field. The United States continues to expand LNG capacity through various projects along the Gulf Coast.

In other regions, petrochemical, LNG, and CCS projects are also competing for rotating equipment, cryogenic equipment, and high-pressure facilities from the same suppliers.

The result is what could be described as "global manufacturing congestion.” Equipment prices are not the only concern. What is even more valuable is the "manufacturing slot."

A company may have the financial resources to purchase an MCHE or compressor, but money cannot instantly create additional fabrication capacity. If the production queue is already full, the project must still wait.

This is where a simple principle of the LNG industry applies: whoever secures a manufacturing slot first receives the equipment first. And whoever receives the equipment first has a greater chance of producing LNG sooner.

Why Must Masela Move Faster?

For international suppliers, the financial value of a project is not the only consideration. They also assess execution certainty.

1. Will the project actually proceed?

2. Is the financing sufficiently secured?

3. Is the design sufficiently mature?

4. Is the EPC strategy clear?

5. Can procurement decisions be made quickly?

Masela has a long history of development. Its development concept has changed, its schedule has shifted, and the project now also incorporates large-scale CCS. From a supplier's perspective, all these factors may translate into additional risks.

Therefore, Masela must send a very clear message to the global manufacturing market: "This project is real. This project is ready. And this project will move."

Without such certainty, suppliers will naturally prioritize other projects that have already placed firm orders.

EPC Is Not Just About Who Builds the Facilities

It is in this context that the selection of the EPC consortium becomes highly strategic. An EPC contractor is not merely a company responsible for constructing facilities. For LNG megaprojects, the ability to access global supply chains is just as important as engineering and construction capabilities.

Consortia with extensive LNG experience typically have established working relationships, procurement channels, framework agreements, and negotiation experience with suppliers of MCHEs, compressors, turbines, and various specialized equipment.

They also understand one crucial factor: when purchase orders must be issued to avoid losing manufacturing slots. Therefore, the evaluation of Masela's EPC consortium should not stop at identifying who offers the most competitive price.

There is another question that may be far more decisive: "Who can guarantee the fastest access to Long-Lead Items?"

In megaprojects such as Masela, an EPC proposal that initially appears cheaper could ultimately become far more expensive if the project is delayed by one or two years.

Should Equipment Be Ordered Before FID?

This is where Indonesia may need to think more boldly. In global megaproject development, strategies such as early procurement, advance purchase orders, or limited notices to proceed are used for equipment that lies on the critical path.

This means that certain procurement activities can begin to be secured even before the entire EPC process is fully underway. Of course, such strategies carry risks.

1. What if the FID is delayed?

2. What if the design changes?

3. What if the facility configuration changes?

But the question must also be reversed: How much could we lose if we wait until FID is completed, only to discover that manufacturing slots have already been taken by other projects?

In an LNG megaproject, a one-year delay does not simply mean losing time. It can mean billions of dollars in lost LNG revenue, higher cost escalation, increased financing costs, and missed market opportunities. Therefore, the question is no longer simply:

"Is it too risky to order LLIs early?"

But also:

"Could delaying those orders actually be even riskier?"

Three Scenarios for Masela's Future

In simple terms, we can envision three scenarios for the development of the Masela Block. In the first scenario, if major LLIs can be secured immediately after FID—or if certain critical equipment can be reserved earlier through an early procurement strategy—the chances of meeting the production schedule would be significantly greater.

The second scenario occurs when MCHEs and rotating equipment have been secured, but CCS development is delayed.

Under these circumstances, the overall commissioning schedule may also be pushed back because the CO₂ handling and injection systems are integral parts of the project's configuration. The third scenario is the one that must be avoided at all costs: Masela enters the global manufacturing queue too late.

If procurement is delayed by 6–12 months and manufacturing slots have already been taken by other projects, the resulting delay may not be limited to just six or twelve months.

Domino effects involving engineering, shipping, installation, mechanical completion, and commissioning could push back first LNG production by a much longer period.

This is why LLIs must not be treated merely as a procurement issue. LLIs are a strategic project issue.

Lessons from LNG Projects Around the World

The LNG industry has already provided numerous lessons.

Major projects such as Ichthys LNG in Australia, Tangguh LNG in Indonesia, Qatar's LNG expansion, and LNG projects in the United States demonstrate how supply chains, fabrication capacity, and the availability of specialized equipment can affect project schedules.

1. The lesson is simple.

2. FEED may be completed.

3. Permits may be secured.

4. Financing may be available.

5. EPC contractors may already be on-site.

But if critical equipment has not arrived, the LNG plant still cannot operate.In other words, the critical path of an LNG project does not lie entirely at the project site. Part of Masela's critical path may be located in a workshop in Japan. Another part may be in a factory in the United States. Another may be in a fabrication yard in Korea. And yet another may be in a manufacturing facility in Europe.

This is the real arena in which Masela's next struggle will unfold.

Liberating Masela

Eighty-one years after the Proclamation of Independence, Indonesia is certainly no longer fighting for its freedom with sharpened bamboo spears. The arena of struggle has changed.

Today, independence also means a nation's ability to control its resources, develop infrastructure, ensure energy security, master technology, create added value, and make strategic decisions swiftly.

It is in this context that the Masela Block represents something far greater than merely an LNG project. The gas reserves in Masela are part of Indonesia's natural wealth, preserved beneath the Arafura Sea for millions of years.

That wealth only becomes truly meaningful when it can be produced and deliver benefits to the Indonesian people. Groundbreaking is an important step.

It is like a proclamation that the project is finally moving forward. But just as Indonesia's struggle for independence did not end on August 17, 1945, Masela's journey does not end with groundbreaking.

1. FID must be finalized.

2. The EPC contractor must be selected.

3. Financing must be secured.

4. LNG markets must be locked in.

5. CCS must be completed.

Equally important, Long-Lead Items must be freed from the lengthy queues of global manufacturing.

We must not allow a situation in which the gas has already been discovered, the market needs it, Indonesia needs it, the technology is available, and groundbreaking has already taken place, yet first LNG production must wait for years simply because we were too late in ordering the "heart" of the plant.

Therefore, as we commemorate the 81st anniversary of Indonesia's independence, perhaps it is time to give the word merdeka—freedom—another meaning.

Not only political independence, but also energy independence. The freedom to determine how our natural resources are developed. Freedom from slow decision-making. Freedom from dependence on supply chains whose constraints we failed to anticipate.

And specifically for the Masela Block:

"Liberate Masela from the constraints of Long-Lead Items."

Because in today's global LNG industry, those who secure manufacturing slots first will be the first to produce LNG. After Masela's exceptionally long journey, Indonesia has already waited far too long. It is time for Masela to be truly liberated.

Thank you to Mr. Taufik for sharing the data.

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Bogor, shortly before dawn

Monday, August 17, 2026