'Piping gas to Dili will cost $5bn more'

Australia’s Woodside Petroleum said today that the option of piping gas from the Greater Sunrise fields to a liquefied natural gas plant in Timor-Leste would cost $5 billion in capital costs more than its preferred floating LNG solution.

Upstream staff  03 June 2010 04:36 GMT

Woodside chief executive Don Voelte also said the Timor-Leste option presented "significant technical risks".

Voelte said the FLNG concept chosen by the joint venture provided "the best commercial advantage consistent with good oilfield practice".

The Woodside boss said that "contrary to what you may hear in the media about the Sunrise JV 'stealing' the resource from Timor-Leste" the joint venture's economic modelling showed Timor-Leste stands to make $13 billion over the life of the project for its 18% share. At the same time, the Australian government stands to earn about $19 billion from its 82% share.

The FLNG plan would see the project producing from seven subsea wells at field start-up. At full field development, the project will be produce from 26 wells via a distributed subsea gathering system, comprised of a number of main flowline headers.

Voelte said Woodside has submitted its FLNG field development plans to both countries' regulators, and these included feasibility studies on the two other options - Timor LNG and Darwin LNG - "with very clear reasoning behind our decision. Now it is the regulator’s turn to act"