Progress is being made in Timor Leste LNG project, developers insist

A LNG project in Timor Leste would be a significant boost to the economy of the tiny nation, but it remains some way from materialising.

Progress is being made in developing a LNG project in Timor Leste, the projects developers and governments have insisted after the latest round of talks over the future of the much delayed development.

Australia’s federal Labor government, Timor Leste government, Woodside Energy and Japan’s Osaka Gas held a fresh round of talks in Dili to progress the Greater Sunrise project.

The projected multi-billion-dollar Greater Sunrise development on the maritime boundary between Timor Leste and Australia has been stalled for decades amid disputes over where the gas should be processed into liquefied natural gas

In a bid to kick-start the project, parties said they had held a spate of talks, the latest of which occurred this week.

“During this round of negotiations, the Sunrise Joint Venture provided an update on the Concept Study being undertaken by Wood PLC on behalf of the Sunrise Joint Venture. All parties are looking forward to seeing the results of the study by no later than the fourth quarter of this year,” the group said in a statement.

The parties said the meeting marked a step forward in the collective ambition to agree the key governance documents that will set out the regulatory and legal frameworks to support the development of the Greater Sunrise gas and condensate fields.

“Since the resumption of negotiations in October 2023, meaningful progress has been made,” the parties said in a communique issued.

The Sunrise project is projected to hold some 5.3tr cubic feet of gas that Timor-Leste hopes could supply Asian markets and become a vital revenue source for the tiny economy.

But the project remained hampered by economics, with a split about where to process the gas and merits of doing so. Timor-Leste has proposed a domestic processing facility, while analysts have speculated the most feasible position would be piping it to Darwin.

The project lies some 450KM from Darwin.

Hopes, however, were raised when the partners said they would review the prospects for the project, examining the feasibility of extracting the gas, processing on Timor-Leste or Australia, and LNG sales to neighbours.

The consideration came after the long-running maritime border dispute between the two nations was resolved with a treaty in 2018.

But with the project languishing for decades, there is scepticism about its prospects - though proponents insist that global demand for LNG is soaring and the global transition is expected to exacerbate the trend - heightening the merits of the project.

Timor-Leste has a 56.56 per cent stake in the Greater Sunrise field – after buying out Shell and Conoco Phillips. Woodside owns 33.44 per cent and Osaka Gas holds the remaining 10 per cent.