OPINION: "MASELA in the Vortex of Global Energy Geopolitics"

The Indonesian Gas Society (IGS) once again hosted the IndoPacific LNG Summit in Bali on July 21-22, 2026. This time themed "The New Energy Trilemma Balancing Security, Decarbonisation, and Geopolitical Stability". This theme is highly relevant to current conditions. Several panelists and keynote speakers presented very interesting topics from different backgrounds and perspectives, ranging from upstream, midstream, to downstream gas and LNG companies. From producers, buyers, traders, technical and business consultants, to gas and LNG infrastructure providers. They came not only from Asia but also represented global companies, including Latin America (Colombia), Europe (Germany and Hungary), Russia, and other Pacific nations.

Amid growing global geopolitical uncertainty, one fact is becoming harder to deny: energy is no longer just an economic commodity, but a strategic instrument of national security. The Russia-Ukraine war, Middle East conflicts, and rising rivalry in the South China Sea have reshaped the global energy trade map. Liquefied natural gas (LNG), previously viewed merely as an export commodity, is now a strategic asset contested by many nations.

One highlight, INPEX's presentation at this Indo-Pacific LNG Summit provided a very clear picture of this shift. Asia will face major challenges from rising LNG demand, while supply growth remains slower than demand growth. In this context, the Abadi Masela Project takes on a far greater significance than just a conventional oil and gas project.

The World is Entering an Era of LNG Shortage

Global LNG demand is expected to continue rising alongside the energy transition from coal to natural gas. Projections presented show world LNG consumption expected to reach around 597 million tonnes per annum (MTPA) in 2030, then increase to around 742 MTPA in 2050, compared to about 433 MTPA in 2025. Most of the increase in consumption comes from Asian countries requiring clean energy to support industrial growth and power generation.

Ironically, new LNG capacity additions largely originate from the United States and the Middle East. The Asia region itself has relatively few large-scale LNG projects entering the development stage. This condition makes the Asia Pacific the region with the largest LNG deficit in the world.

Asia Will Experience a Supply Deficit

The slide presented by INPEX showed that in 2025 Asia-Pacific's LNG demand is around 266 MTPA, while supply is only about 171 MTPA, resulting in a deficit of around 95 MTPA.

By 2040, demand is projected to increase to around 473 MTPA, while regional supply will only be around 159 MTPA, causing the deficit to surge to around 314 MTPA.

Conversely, the Americas will see a surplus of around 474 MTPA. The Middle East will have a surplus of around 138 MTPA. Europe will remain in deficit, though relatively small.

This means Asia will become increasingly reliant on LNG shipped from other regions with significantly longer sailing times. Shipments from the US to Asia require about 25–30 days, whereas from the Middle East it takes about 15–20 days. Reliance on international shipping routes will heighten geopolitical risks as well as logistics costs.

Geopolitics Makes LNG Prices Increasingly Volatile

The Russia-Ukraine conflict altered the direction of global LNG trade. Europe, having lost Russian pipeline gas supplies, turned to the spot market for LNG. Consequently, LNG prices spiked to record highs of around US$84.8/MMBtu in August 2022.

Conflicts in the Middle East have again raised risks of global supply chain disruptions. Although the impact is not as large as the Russia-Ukraine conflict, supply uncertainty continues to keep global LNG price volatility high.

For importing nations like Japan, South Korea, Taiwan, and several ASEAN countries, this situation poses a serious threat to energy security.

Why is Masela So Strategic?

Amid the Asian LNG supply shortfall, the Abadi LNG Project stands as one of the few mega LNG projects still being developed in the Asia region. Interestingly, this project is also designed as the first LNG project in Indonesia to incorporate CCS (Carbon Capture and Storage) from day one of operations, allowing CO₂ emissions from gas production to be directly re-injected subsurface. This enhances the competitiveness of Indonesian LNG in a global market that is increasingly focused on decarbonization.

Momentum Must Not Be Lost

After decades of shifting concepts—from FLNG to onshore LNG—the Masela Project is finally entering a much more concrete phase. The project's groundbreaking was carried out by the President last week. FEED has begun, the government has granted key approvals, and the Final Investment Decision (FID) target is set for around 2027, with production targeted for the early 2030s. The government has also pushed to accelerate resolving bureaucratic hurdles so the project faces no further delays.

Thus, the greatest challenge is no longer technical. What matters more is the ability of all stakeholders to maintain policy consistency, expedite licensing, ensure fiscal certainty, and build supporting infrastructure in Eastern Indonesia.

As such, the success of the Masela project should not be measured solely by the size of foreign exchange earnings from LNG exports.

Therefore, the success of the Masela project should not be measured solely by the amount of foreign exchange earned from LNG exports. More importantly, it is how that gas can serve as a catalyst for national industrialization.

Masela gas should serve as the foundation for power generation in Eastern Indonesia; fertilizer industries; petrochemicals; mineral smelters; methanol and ammonia production; city gas network development; as well as downstream gas-based industries.

The added value does not stop at the LNG terminal, but evolves into new economic growth hubs in Maluku and eastern Indonesia. Therefore, the author previously proposed a hybrid combination of LNG and CNG as a solution to meet domestic demand, which has been set at around 60% of future gas production.

Masela is a strategic opportunity for Indonesia to strengthen national energy security, elevate its geopolitical standing in the Asia-Pacific region, accelerate Eastern Indonesia's development, and demonstrate that natural gas remains the most realistic transition energy toward a low-carbon economy.

Following the project's ceremonial groundbreaking, the challenge now is how swiftly production from this field can be realized before this strategic window of opportunity is seized by other nations.

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Jimbaran-Bali, approaching Dhuha.

July 23, 2026