Subject: RT: ET lobbies for Greater Sunrise gas onshore
INTERVIEW-E.Timor lobbies for Greater Sunrise gas onshore
By Joanne Collins
PERTH, Feb 24 (Reuters) - Tiny East Timor is lobbying developers of the A$6.6 billion ($5.12 billion) Greater Sunrise gas project to send natural gas onshore for processing in the impoverished nation instead of sending it to Australia, a Dili government official said.
``The prime minister of Timor Leste, Mari Alkatiri, has met with the project's operator, Woodside Petroleum, and asked that they do a feasibility study on bringing the gas onshore and they agreed,'' Jose Teixeira, East Timor Secretary of State for Mineral Resources and Energy, told Reuters on Tuesday.
Bringing Greater Sunrise gas onshore East Timor for processing into liquefied natural gas (LNG) for export would put millions of dollars into the newly independent nation's coffers and create much-needed employment.
The half-island nation is relying on oil and gas revenues to help rebuild the economy after a 1999 vote to breakaway from 24 years of Indonesian rule led to widespread violence that left it in ruins.
Greater Sunrise, lying around 450 km northwest of the Australian city of Darwin and 150 km south of East Timor, contains an estimated 8.3 trillion cubic feet (235 billion cu metres) of gas and 300 million barrels of condensate.
Operator Woodside Petroleum said the project's joint-venture partners were still assessing whether to bring the gas onshore or process it at sea in what would be the world's first floating liquefied natural gas facility.
``In the last 12 months we've revisited all the engineering work because the venture had differing views internally on floating versus onshore, so we really needed to bring that to a head by putting firm technical data in front of the venture,'' said Keith Spence, Woodside's acting chief executive officer.
``A decision will be made within months,'' Spence told Reuters in an interview.
LNG SALES CONTRACTS
The venture seeks to pitch most of the project's vast gas reserves to Asia. But Australian-based Woodside said marketing the LNG would prove difficult until the Australian and East Timor parliaments ratified a pact mapping out the field's boundaries in the resource-rich Timor Sea.
``This is probably the biggest issue for us because in terms of getting a contract in the market place we need to have some fiscal certainty and that... agreement is the first step to get to the point where we can go to the market and say we have secure title over this resource,'' Spence said.
First commercial LNG production from Greater Sunrise is not scheduled to begin until 2010, but Spence said the project's partners wanted to pin down some preliminary deals this year.
``We've said to ourselves that 2004 is the year for us to really make the big step forward on Sunrise in the sense of really trying to bring a customer to the project,'' he said.
Australia and its northern neighbour, East Timor, signed a temporary revenue-sharing treaty last year for some oil and gas fields that will stay in place until a permanent maritime boundary is agreed.
The treaty splits revenues 90:10 in favour of East Timor from a shared 62,000 sq km (24,000 sq miles) region.
But a separate arrangement needs to be reached for the Greater Sunrise project because 20 percent of it lies in the treaty area and 80 percent in Australian waters. Spence said he was optimistic the agreement would be ratified but said that East Timor was seeking better terms with Australia.
``I guess at the moment they want to see a bit more tangible commitment to negotiating from the Australian government on the boundary before they will actually move forward, so they are just trying to maximise their leverage,'' he said.
Woodside has a 33.44 percent interest in the project, ConocoPhillips has 30 percent, Royal Dutch/Shell has 26.56 percent and Osaka Gas the balance.
Woodside is 34 percent owned by Shell. Woodside shares closed at A$15.30 on Tuesday, up A$0.05.
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