Woodside flags building LNG plant in Timor-Leste to break stalemate over $50bn Sunrise gas field
Timor-Leste is a step closer in getting its wish for an onshore LNG gas export plant after Woodside said it was finally open to such a move.
Woodside Energy will consider building a LNG export plant in Timor-Leste after pushing back against such a move for years, in an effort to break a stalemate over developing the $50bn Sunrise gas field.
The company said on Monday that it will complete a study, which has a “strong focus on delivery of gas to Timor-Leste”, with Sunrise Joint Venture partners: the Timor-Leste government and Osaka Gas Australia.
Woodside chief executive Meg O’Neill flagged in December that the company was open to building an onshore gas plant in Timor-Leste, despite indicating it would be more expensive than piping the field’s 5.3 trillion cubic feet of gas to Australia for processing.
But on Monday Ms O’Neill said that gas processing technologies had evolved, making such a project potentially more feasible, and it was time to reconsider building a plant in Timor-Leste after years of opposition.
“It is important we continue to look at ways to develop the Greater Sunrise fields using the latest technologies by evaluating, for example, modular LNG, that did not exist in the past,” Ms O’Neill said.
“Against a backdrop of global geopolitical instability and constrained energy supply chains, there is an opportunity for the Sunrise Joint Venture to significantly advance this regionally important project.”
Ms O’Neill cited modular construction as a more viable way of completing a greenfill gas plant in Timor-Leste, highlighting successful projects in the northern hemisphere, at Woodside’s investor day in early December.
“There has been a lot of work in the industry over the past few years and you can look at some of the things that have been done in the Gulf of Mexico. For example, looking at modular construction, looking at different approaches,” she said.
“The Commonwealth LNG project that we’ve signed offtake agreements with is one that’s using a modular construction and very different designs.
“The Timorese are very keen to have that development in country and we recognise it is an important national project for them, so we feel like it’s appropriate to reopen the concept evaluation, understand the technologies, understand the technical challenges.”
The Timor Trench has long been considered an obstacle to piping gas from the Sunrise fields to Timor-Leste versus tapping into existing infrastructure in northern Australia. The Sunrise field is about 450km off Darwin and 150km south of Timor-Leste.
“Over the years we’ve looked at Sunrise many, many different times. We have done technical pipeline studies to understand the feasibility of going across the trench,” Ms O’Neill said at the company’s investor day.
“Those studies have always indicated that with the right will, the right engineering, the right execution plan, that you can execute that scope of work.
“The challenge has always been the economics. If you look at Darwin – so there are two LNG plants in Darwin. They both have port infrastructure. There’s space at both of those locations to build additional trains. So the cost of LNG processing capabilities – you have a longer pipeline but you just have to build a train, not all of the associated greenfield equipment which would have to be built in Timor.”
In a statement Woodside and its partners said the new study will “consider all of the key issues for delivering the gas, for processing and LNG sales, to Timor-Leste compared to delivering the gas to Australia”.
“The studies will include evaluation of which option provides the most meaningful benefit for the people of Timor-Leste. The SJV (Sunrise Joint Venture) is aiming to complete the concept select program expeditiously given the benefits that could flow from developing the Sunrise fields.”
Antonio de Sousa – president and chief executive of Timor Gap, which owns 56.6 per cent of the project – said he was pleased that his organisation’s efforts have “substantially contributed towards realising the long-awaited goal of developing Greater Sunrise”.
“This path forward is a significant commitment to our stakeholders, to the aspirations of those who made sacrifices to achieve independence for the Democratic Republic of Timor-Leste, and to the future of our people and Timor-Leste,” he said.
“It offers a clearer path to prosperity, equality, peace, stability, and sustainability for current and future generations.”
Osaka Gas Australia managing director Yo Otsuka said it was important to assess and compare the development concept from both technical and commercial points of view to select the best option for the success of the Sunrise project.
Woodside owns 33.4 per cent of the project, with Osaka Gas Australia owning the remaining 10 per cent.
