PERTH: Australia's Woodside Energy and Timor Leste have agreed to study sending gas from the large, undeveloped Greater Sunrise fields to a new liquefied natural gas plant in the South-East Asian nation that could start exporting in the next seven years.
The agreement calls for the two sides to study the commercial and technical viability of a five-million-metric-tonne project, with a high-level plan to start producing LNG as early as 2032-2035, Woodside and Timor Leste's petroleum and mineral resources ministry said in a joint statement on Tuesday (Nov 25).
That marks the first time the two sides, long at loggerheads over development of the fields, which lie between Timor Leste and Australia, have outlined a potential start-up date.
"The TLNG project presents the best economic, social and strategic benefits for the people of Timor-Leste, and we are committed to working constructively with Woodside, the Greater Sunrise joint venture and other parties,” said Timor Leste's Petroleum and Mineral Resources Minister, Francisco da Costa Monteiro.
The project would include a domestic gas plant and a helium extraction plant. Helium commands a high premium owing to its scarcity and use in the semiconductor industry.
Woodside CEO Meg O’Neill said the agreement would address remaining issues such as a downstream commercial structure to attract financing and to better understand "the preferred route of the gas export pipeline".
The deep Timor Trough is seen as one of the hurdles for a gas pipeline from the Greater Sunrise fields to Timor Leste.
Dili has long pressed for Sunrise gas to be sent to a new LNG export plant in Timor Leste and not to Darwin in northern Australia.
Woodside has long resisted, arguing it is not cost effective, although O’Neill had suggested smaller "modular" LNG processing units could be built in Timor Leste to cut costs.
MST Marquee analyst Saul Kavonic put the cost difference between Australia and Timor Leste at more than US$5 billion.
Alongside the study, fiscal, regulatory and legal frameworks to support the upstream development of the fields need to be negotiated between the Sunrise Joint Venture, Timor Leste and Australian governments, the statement said.
The partners in the gas field are Woodside, which holds 33.44 per cent, national oil company Timor Gap, which has 56.56 per cent, and Osaka Gas with 10 per cent. Dili used its sovereign wealth fund to purchase Shell and ConocoPhillips' stakes in the project.
A maritime boundary was agreed by the two nations in 2018. - Reuters
