Timor-Leste may invite Petronas to develop gas field

Published: 2010/01/14

DILI: Timor-Leste's government may invite Malaysia's Petroliam Nasional Bhd (Petronas), not Australian energy firm Woodside Petroleum and partners, to develop the offshore Greater Sunrise gas field, a ministry official said yesterday.

Timor-Leste, also known as East Timor, separately announced yesterday that it has rejected Woodside's plan to develop the offshore Greater Sunrise gas field without building an onshore plant to liquefy the gas.

"Our government will not approve their (Woodside's) proposal because they just have two options: one is to bring the pipeline to Darwin and the other is onshore development, and these kind of options do not benefit our country and people," Manuel Mendonca, director of communications in the natural resources ministry, said.

"From East Timor's side, we just want to bring the pipeline to East Timor, and we have differences in position on the options so we will contract another company to develop Greater Sunrise", if Woodside does not change its position," he added.

Mendonca, who is also a party to the negotiations, said Petronas could develop Greater Sunrise instead.

"The Malaysian company Petronas is qualified to develop the Greater Sunrise field," he said.

"We have good relations with Petronas and Petronas has helped us do much in the oil sector and they are ready to build LNG plant," said Mendonca.

Proposals to exploit Greater Sunrise - estimated to hold 240 million barrels of light oil and 5.4 trillion cu ft of natural gas - must be approved by both sides, a 2007 treaty between Indonesia and Australia states.

The deal gives the parties until 2013 to agree upon a joint development plan. But Timor-Leste's latest position shoots down all proposals put forward so far by the group headed by Woodside.

In their toughest stance to date, Timor Leste says it will not support Woodside's development plan, possibly rendering the 2007 treaty meaningless.

"The current proposed plans of Woodside and the consortium partners to pipe gas from the Greater Sunrise field to either Darwin or a floating LNG (liquid natural gas plant) would not be approved by the government," Secretary of State Agio Pereira said in a statement.

"The executives of Woodside have underestimated the government's priority in ensuring that the resources owned by the people of Timor-Leste are properly managed," Pereira said.

Woodside, which leads the consortium including Royal Dutch/Shell, Osaka Gas and ConocoPhillips, has argued that piping the resources to an existing processing plant in Darwin, more than 500km away, is the most commercially viable option. It has also researched a floating gas processing plant, which would be the first in the world and cost billions of dollars.

But Timor Leste wants to run a deep sea pipeline to its coast, about a third of the distance of a pipeline to Darwin in Australia's Northern Territory.

Woodside said in a statement yesterday that it is still considering development options with its joint venture partners and will seek to "develop the reservoir to the best commercial advantage, consistent with good oilfield practice".

It said "the development of Sunrise will deliver significant social and economic benefits, including petroleum revenues, taxes and training and employment opportunities to both" countrie
s. - Reuters, AP

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