Timor-Leste and Woodside strike deal to advance the Greater Sunrise gas project

Timor-Leste and Woodside have signed a significant agreement to advance studies for a Timor-based LNG plant, potentially ending decades of deadlock.

Woodside Energy chief executive Meg O'Neill at the Karratha Gas plant.

The long-delayed Greater Sunrise gas project has taken its most substantive step forward in years after Timor-Leste and Woodside signed a co-operation agreement to advance technical and commercial studies for a Timor-based LNG development.

It’s a deal which could break a decades-long impasse over how the multibillion-dollar resource should be developed.

Announced on Tuesday, the agreement commits Timor-Leste’s Ministry of Petroleum and Mineral Resources, and Woodside to a program of work to mature a greenfield LNG concept on Timor’s south coast.

This would include pipeline studies, a downstream structure design, a domestic gas facility and a helium extraction plant. If the studies lead to a viable concept and final investment decisions, first LNG could be produced between 2032 and 2035.

The move marks a significant change in tone between the parties, whose disagreements over processing location have repeatedly stalled the project despite the resource’s scale. Greater Sunrise contains an estimated 5.3 trillion cubic feet of gas and substantial liquids, but its development has been frustrated by intersecting political, commercial and territorial disputes since the early 2000s.

For years, Timor-Leste has insisted that the gas should be piped to its territory to underpin domestic industrialisation and maximise national revenue.

Woodside, as operator, maintained that an onshore Timor LNG plant would be technologically challenging, economically marginal and far more expensive than sending gas to Darwin, where infrastructure and labour already exist. The dispute became a defining fault line in bilateral relations.

Tensions escalated during the protracted maritime boundary negotiations with Australia. Although the 2018 treaty redrew the boundary in Timor-Leste’s favour and set out revenue-sharing arrangements, it did little to resolve the core commercial disagreement. Successive attempts to relaunch talks collapsed, and the project halted as Timor-Leste grew increasingly vocal about pursuing alternative partners – including Chinese state-owned firms, if the joint venture would not support a Timor-based development.

The announcement of an agreement signals a thaw after years of deadlock. Timor-Leste Petroleeum Minister Francisco da Costa Monteiro said the new framework demonstrated that the government and Woodside were “united in their ambition” to bring the project into production and that a Timor-based LNG plant offered the “best economic, social, and strategic benefits” for the country.

Woodside chief executive Meg O’Neill said the work would extend the concept study completed last year and would focus on resolving remaining issues such as the downstream commercial structure needed to attract financing and identifying a preferred gas export pipeline route.

Despite the progress, the path is still fraught. Building a large-scale LNG plant in one of Asia’s least-developed economies would require billions of dollars in capital, complex engineering to lay a deepwater pipeline across the Timor Trough, and agreement between Timor-Leste, Australia and the Sunrise joint venture on fiscal, regulatory and legal frameworks – negotiations which could continue for years.

Originally published as Timor-Leste and Woodside strike deal to advance the Greater Sunrise gas project