East Timor Makes New Pitch on Stalled Woodside Gas Project
|Friday, August 30, 2013
PERTH, Aug 30 (Reuters) - East Timor is offering to invest $800 million to build a pipeline to take gas from the Timor Sea to the tiny nation, as it makes a new pitch to resolve a dispute with Australia's Woodside Petroleum over how to develop huge fields in the area.
East Timor has insisted for a decade that a liquefied natural gas plant to process gas from the Greater Sunrise fields should be built on its shores, bringing with it much-needed development. Woodside says the plan is uneconomical and wants to use a floating LNG plant.
Industry insiders say the chance of a near-term breakthrough remains slim, despite the new gambit. That is partly because East Timor also wants to unpick a revenue-sharing agreement after accusing Australia of engaging in espionage when the treaty was struck.
Australia will not confirm or deny the allegations, but has said the accusation is not new.
East Timor has filed for arbitration and if it overturns the treaty, it could open up discussions on a disputed maritime border, risking further delays to the project.
East Timor Secretary of State for Natural Resources Alfredo Pires said Dili is prepared to invest $800 million in a pipeline to help move things forward, using funds from its $14 billion Petroleum Fund.
"It's an indication of our willingness to take on some of the risks of the project," Pires said by telephone, adding it would be a commercial investment and could return around 7 percent, above the 2 to 3 percent the fund is currently seeing.
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