Subject: RT: E.Timor, Australia to hold April sea border talks

Also: NZ weighs LNG imports as gas supply crunch looms

E.Timor, Australia to hold April sea border talks

Thursday February 26, 4:49 AM EST

PERTH, Feb 26 (Reuters) - East Timor and Australia, sparring over where to place sea boundaries that divide oil and gas reserves worth billions of dollars, will meet in April for a second round of negotiations, East Timor said on Thursday.

Both countries have agreed to a temporary revenue-sharing treaty for some oil and gas fields in the Timor Sea, which splits the revenue 90:10 in favour of East Timor.

But Dili says it will not be able to offer investors any certainty until a permanent boundary is in place.

"We and many others in this industry share the view that the resources of the Timor Sea can be optimally developed only when permanent maritime boundaries are in place," Jose Teixeira, East Timor's secretary of state for mineral resources and energy, told a gas conference in Western Australia on Thursday.

"This outcome, like no other, will give optimum certainty and stability for investments in the area,"

East Timor, which became independent in 2002 after years of often violent occupation by Indonesia, relies on oil and gas revenues to help rebuild its economy after a 1999 independence vote sparked a wave of violence that left it in ruins.

Teixeira estimated the Bayu-Undan liquefied natural gas (LNG) project alone could generate $100 million a year over two decades for the newly independent country from 2005.

Production of natural gas liquids at the field, operated by the third-largest U.S. oil firm, ConocoPhillips (COP), began earlier this month.

But many are sceptical of a quick solution on maritime boundaries and say the issue is as much about carving up revenues as drawing sea borders.

"Anyone who thinks this round of talks will create a breakthrough has got rocks in their head," said an international expert in oil and gas negotiations, who declined to be named.

The meeting is scheduled to be held in East Timor's capital, Dili, on April 19-23.

The other vital resource for East Timor in the disputed area is the A$6.6 billion Greater Sunrise project operated by Australian firm Woodside Petroleum (WPL).

The joint venture is still assessing whether to process the LNG at sea in a world-first floating facility, or bring it onshore to northern Australia.

East Timor, however, is lobbying hard to have a processing plant on its soil.


NZ weighs LNG imports as gas supply crunch looms

Reuters, 02.25.04, 6:05 AM ET

By Joanne Collins

PERTH, Feb 25 (Reuters) - Facing a fuel shortage from 2010, New Zealand is considering building a liquefied natural gas (LNG) import terminal in the country's North Island and would look to Australia, East Timor and Brunei as potential suppliers.

New Zealand's two biggest power generators and energy retailers, state-owned Genesis Power and Contact Energy <CEN.NZ>, are due to complete a study on the project by the end of June and make a final assessment three months later.

"The LNG option is clearly up and running. It is being put in place in California, in China, in Japan, the technologies are proven and as an option, it's certainly deliverable," Genesis Chief Executive Murray Jackson told Reuters on the sidelines of an LNG conference in Western Australia on Wednesday.

A terminal with a capacity of around two million tonnes a year is being considered for either the New Plymouth or Marsden Point harbours, both of which are already used for shipments of petroleum products, he said.

Both Genesis and Contact would invest in such a plant, he said, but an operator would likely be brought in.

With exploration programmes over the last two to three years showing few prospects and with the looming depletion of the Maui gas field, which supplies around 80 percent of the country's gas, New Zealand is at a cross roads in terms of future energy supply.

"The Maui gas field is already showing signs of water entry so it's inevitable in due course, perhaps before 2010, that the major gas fields will run out in New Zealand.

"By 2010 and 2014 we will have a fuel shortfall so we should be making a decision now on how to fill that void."

He said New Zealand had been over-confident about its gas reserves, which total less than 1,800 petajoules, and there was now a sense of urgency.

After the Maui field runs dry, New Zealand will be mostly dependent on the yet-to-be-developed Pohokura gas field, which is jointly owned and operated by Shell <SHEL.L> <RD.AS>, Austrian explorer OMV <OMVV.VI> and local firm Todd Petroleum.

The field is estimated to have around 700 billion cubic feet of gas and should be onstream by mid-2006.

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