Subject: East Timor Seeks Pipeline Action
Tuesday, August 25, 2009
East Timor Seeks Pipeline Action
by Mark Dodd
EAST Timor has called for an end to delays over the development of the oil and gas-rich Greater Sunrise field in the Timor Sea after new interest from investors in Malaysia, China and South Korea.
Dili says Malaysian, South Korean and Chinese parties have expressed support for a pipeline from the reservoir to a production facility in East Timor rather than in Darwin.
East Timor Natural Resources Secretary Alfredo Pires said yesterday talks had been held recently with China on the feasibility of an LNG pipeline from Greater Sunrise to the south coast of East Timor.
While energy-hungry China is considering potential joint ventures with Dili in the Timor Sea, it is understood the talks, while resulting in support for Dili's aspirations for a shore-based liquefication plant and pipeline, did not lead to a firm commitment to bankroll the project.
After tortuous negotiations resulting in an agreement in 2007 to defer the question of a maritime boundary for 50 years, Canberra and Dili agreed to split the revenue from Greater Sunrise 50-50, a deal worth an estimated $10 billion to each country.
Mr Pires said Dili was now looking for potential development partners for the Greater Sunrise field.
"There hasn't been anything official regarding Chinese involvement but there have been indications of their interest,' he told The Australian in a telephone interview from Dili.
"Our minister for foreign affairs has gone to talk to China and some of their companies."
China had earlier undertaken a survey of the potential oil and gas prospects for East Timor, the minister said.
"Regarding Greater Sunrise, we'd like the pipe to land on the shores of Timor Leste and as soon as everyone comes round to that idea we'll be ready to go," Mr Pires said.
"The South Koreans, Petronas (Malaysian state-owned oil company) and the Thais, they are
who we've got more close relationships with.
"They've made much more serious proposals than anyone else."
A spokesman for Australian resources company Woodside said a decision on transporting gas from Greater Sunrise would be made in coming months, but currently the company favoured either a floating processing plant or tapping into the existing Darwin pipeline linking the Bayu-Undan field.
Woodside has a 33.4 per cent stake in Greater Sunrise, along with its partners Shell, ConocoPhillips and Osaka Gas.
Industry experts said last night that the cost of building a pipeline and liquefication plant on the south coast of East Timor could run to $8-10 billion for a plant with an output capacity of 3-4 million tonnes of liquefied natural gas per annum.
"Petronas has deep pockets, is one of the world's leading producers of LNG and has great expertise," said a Hong Kong-based energy expert, who asked not to be named.
"But you have to find a buyer for the gas. It would be curious for China to be involved (in building the pipeline and plant) if the customer for the gas is South Korean."