New dawn for Woodside Sunrise gas project as Gusmao takes Timor election

The gas fields, 450km northwest of Darwin and 150km south of Timor Leste, have sat undeveloped for years amid a stand-off over where the gas should be processed.

Woodside Energy chief executive Meg O’Neill is “cautiously optimistic” about the prospects of its long-stalled Sunrise gas project in the Timor Sea in the wake of the latest Timor Leste election.

The Greater Sunrise gas fields, 450km northwest of Darwin and 150km south of East Timor, have sat undeveloped for years amid a standoff over where and how the gas should be processed. Woodside, which operates the project and owns a 33.44 per cent stake, has long favoured its development through LNG facilities in Darwin but the Timor Leste government has argued that it should be piped north to a dedicated LNG plant there.

Xanana Gusmao, the independence hero and first president of East Timor, is poised to return as prime minister after his party won an election at the weekend. Mr Gusmao, who was prime minister from 2007 to 2015, has long argued for the development of a Timor Leste LNG plant for ­Sunrise.

Speaking at a business lunch in Perth on Thursday, Ms O’Neill said Woodside had previously flagged it would revisit various development concepts for Sunrise “to understand the numbers and the trade-offs between bringing the gas shore in Darwin versus bringing it ashore in Timor Leste”.

“The economics are going to be challenging, so we’ll have to get pretty creative and see if there’s maybe some new technologies that help us break through that,” she said.

“But the political will is there and as with many of these developments, that’s an essential ingredient, so I’m glad we have that ingredient.”

While she said there was good political support for the project from the governments of both East Timor and Australia, Ms O’Neill did warn that Sunrise faced a number of challenges.

“It’s a reasonable size gas field, but not a gigantic gas field, and that’s probably one of the reasons why it’s been challenging to develop to this point in time,” she said.

Separately, Ms O’Neill said the ongoing public debates about the respective merits of green, blue, grey and other colours of hydrogen – derived from the methods by which the hydrogen is created – needed to be abandoned in favour of focusing on emissions intensity and cost.

Woodside is working on a number of hydrogen projects in Australia and the US, including a project in Oklahoma that the company expects to be net-zero.

While billionaire hydrogen advocate Andrew Forrest has slammed blue hydrogen – made from gas along with carbon capture and storage – as “greenwashing”, Ms O’Neill said the most important metric was the carbon intensity of the hydrogen.

“The colours really just get people emotionally excited. At the end of the day, we need to look at what’s the impact on the environment, what is the impact on global warming, and that comes down to the numbers. That comes down to what’s the carbon intensity,” she said.

“If you’re producing hydrogen from methane, reforming and capturing the CO2 and sequestering it, that is an equivalent outcome to producing hydrogen from electrolysis.”

She said ensuring the development of the lowest-cost sources of hydrogen would be crucial in developing the hydrogen market.

“We need to stop pursuing labels and really focus on the science and the maths and make sure that we’re doing something that is the most cost-effective way to generate these products,” she said.

“People aren’t using hydrogen in large quantities for ground transportation today. We’re trying to change the world with what we’re doing, and to change the world it has to be cost-effective.”