Timor Leste may ask Malaysia's Petronas, not Australian giant Woodside Petroleum, to develop the offshore Greater Sunrise gas field, a government official claimed.
Government spokesman Agio Pereira told Reuters there were doubts about the commercial viability of Woodside's proposal to pipe gas from the field to either an existing liquefied natural gas processing plant in Darwin or to a floating LNG plant.
Any development of the Sunrise gas field, estimated to hold 5.13 trillion cubic feet of gas and 226 million barrels of condensate, must be approved by both the Australian and Timorese governments, according to a treaty signed in 2007.
Manuel Mendonca, director of communications in the natural resources ministry, told Reuters by phone that the government was now considering inviting Petronas to develop the field instead of Woodside.
"From [Timor Leste's] side, we just want to bring the pipeline to [Timor Leste], 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 said.
"The Malaysian company Petronas is qualified to develop the Greater Sunrise field."
This is the toughest stand Dili has made since Woodside announced early last year that it was no longer considering building an LNG plant in Timor Leste.
In a sign that relations between Woodside and Dili have soured dramatically, the government said all negotiations had ceased since Woodside shortlisted the development plans.
Woodside, however, has said publicly that talks with the government were progressing as planned.
Dili's rejection of the current Sunrise development plans would be a setback to Woodside's ambitions of swiftly developing the field and sanctioning the project in 2011.
"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 would not be approved by the government of Timor-Leste," Dili said in the statement.
Woodside has argued that while Darwin is further from the field, it is less technically challenging and more cost-effective to pipe the gas to the Australian mainland.
It claimed building an LNG processing plant in Timor Leste would require the construction of a 200-kilometre pipeline which would cross a 3.3 kilometre deep trench. Woodside added that the Timor Leste solution would not only be more expensive, it carries "high technical and seismic risk".
Woodside said in November that the Sunrise LNG project could have a production capacity of about 5 million tonnes per annum if it was developed via the existing Darwin plant, while the floating LNG option would give an output of about 4 million tpa.
Timor Leste said concerns mounted after results from various feasibility studies commissioned by the government revealed conflicting conclusions to Woodside's original assertions.
source: upstreamonline.com
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