Gusmao leads Timor group to lobby China for gas plant

Steve Holland | October 16, 2009

<http://www.theaustralian.news.com.au/> The Australian

AN East Timorese government delegation led by Prime Minster Xanana Gusmao is in China looking for support for its bid for a major gas processing plant to be built in East Timor instead of Darwin.

Woodside Petroleum, part of the joint venture with Conoco Phillips, Shell and Osaka Gas to develop the billion-dollar Sunrise gas project, has ruled out East Timor for the site of the gas processing plant.

But East Timor's government said onshore development for the Greater Sunrise gasfield in East Timor could "transform' the impoverished nation.

Deputy Finance Minister Rui Manuel Hanjam said a government-commissioned feasibility study had shown that it was technically viable for the plant to be built in East Timor.

"The point is the nation wants the pipeline to go to East Timor," he said. "Perhaps we can seek alternative solutions from China or other countries that are more independent, such as Malaysia.

"If we (Australia and East Timor) really want to have an equal distribution then the pipeline should come to East Timor. This would help the government's plan to eradicate poverty and boost future economic growth, especially for the country's southern parts. Essentially, one pipeline has already gone to Australia, so the next one should go to East Timor."

Woodside has said the joint venture has spent more than $350million on exploration, appraisal, marketing, technical and commercial feasibility studies since the fields were discovered in the mid-1970s. The Greater Sunrise fields, believed to contain around 8trillion cubic feet of gas, are located within the Joint Petroleum Development Area of the Timor Sea, about 170km from East Timor. Woodside has considered a floating platform processing plant, which would be a world first, and could alleviate political complications.

But Woodside spokesman Roger Martin said Darwin was the best option for an onshore processing plant. "The joint venture is required, under the treaty between Australia and East Timor, to develop the project according to the best commercial advantage and that's what the screening process has been about. The screening process has followed the guidelines," he said.

East Timor's government has sent a delegation to attend the 10th Western China International Economy and Trade Fair.

As well as Prime Minister Xanana Gusmao, the delegation includes Minister of Foreign Affairs Zacarias da Costa, Minister of Finance Emilia Pires, Minister of Infrastructure Pedro Lay, and Secretary of State for Natural Resources Alfredo Pires.

But the East Timor independent monitoring organisation Lao Hamutuk has questioned the reasons for the government's China visit. Charles Scheiner from Lao Hamutuk said: "Perhaps the visit is related to the new Budget and Financial Management Law which parliament passed on September 24."

"This law allows the Minister of Finance to borrow money from governments like China without any parliamentary or public oversight of the terms or repayment of the loan."

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