Subject: SMH: NT offers to help save E Timor gas deal

NT offers to help save E Timor gas deal By Jill Jolliffe in Dili February 11 2003

The Northern Territory Government has offered to mediate between East Timor and the Commonwealth Government to save a $US3 billion ($5 billion) natural gas deal in danger of collapse unless ratifed by Australia within the next month.

Paul Henderson, the NT's Minister for Asian Relations and Trade, made the offer during a meeting in Dili yesterday with Prime Minister Mari Alkatiri.

"The Commonwealth is very steadfast on one side, and the Timorese on the other," Mr Henderson said, "and ultimately Alexander Downer and Mari Alkatiri will have to get together for a diplomatic-political solution."

Australia has failed to ratify the Timor Sea Treaty, agreed to last year, despite a promise to do so by December 31. The delay has jeopardised the future of the Bayu Undan project to pump natural gas to Darwin from the Timor Sea.

America's ConocoPhillips, which heads the project, must confirm its contracts with buyers by March 11, known as the "drop-dead" date by the East Timorese negotiating team. Its principal client is the Tokyo Gas Company.

Alisa Newman of the Dili government's Timor Sea Office, said Australia "holds the power of life and death over East Timor ... treaty revenues are the economic future of this country".

The original treaty was signed on East Timor's independence day, May 20, 2002, subject to ratification by the two national parliaments. Despite the disruption stemming from riots on December 4, including an attack on the parliament building, East Timor kept its side of the bargain and ratified on December 17.

Mr Henderson said the Commonwealth was linking ratification with separate negotiations over the Greater Sunrise oilfield in a bid to increase its bargaining power.

The memorandum of understanding John Howard signed on May 20 said the Greater Sunrise negotiations would not prejudice the treaty.

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