In a significant move for the regional energy sector, Woodside Energy and the government of Timor-Leste have signed a pivotal cooperation agreement, breathing new life into the long-stalled multi-billion dollar Greater Sunrise gas fields development.
A Breakthrough After Years of Stalemate
The agreement, announced on Tuesday, marks a crucial step forward in a project that has been hampered for years by disagreement. The core dispute centred on how to process the gas: Timor-Leste, a nation desperate for economic development, insisted the liquefied natural gas (LNG) plant be built on its southern coast to maximise local jobs and infrastructure. In contrast, Woodside, as the project operator, maintained that piping the gas to its existing facilities in Darwin, Australia, was the only commercially viable path for its shareholders.
This new pact builds on a breakthrough agreement from two years ago that ended the impasse. It commits both parties to mature a specific development concept, which now includes a five-million-tonnes-a-year LNG plant on Timor-Leste's south coast. The integrated plan also features a domestic gas plant and a facility for extracting helium.
The Path to Production and Strategic Drivers
If all subsequent hurdles are cleared, the project could see first production as early as 2032. However, this timeline is contingent upon the establishment of agreed regulatory and fiscal frameworks that convince Woodside the massive investment is commercially sound.
A combination of factors has catalysed the project's revival. Stronger global gas prices following Russia's invasion of Ukraine and a brighter long-term outlook for LNG have improved the project's economics. Furthermore, strategic concerns that a cash-strapped Timor-Leste could be vulnerable to external influence have added urgency to unlocking this new revenue stream for the nation.
Ownership and a United Front
The ownership structure of the Greater Sunrise fields sees Timor-Leste holding a majority 56.56 per cent stake, with Woodside owning 33.44 per cent and Japan's Osaka Gas holding the remaining 10 per cent.
In a joint statement, both parties hailed the cooperation agreement as a milestone. Timor-Leste's Petroleum Minister, Francisco da Costa Monteiro, stated that the Timor-based LNG option offers the best economic and strategic benefits for his country, demonstrating a united ambition with Woodside. Woodside Chief Executive Meg O'Neill said the new work would address key remaining considerations, including the commercial structure and the final route for the gas export pipeline, paving the way for a final investment decision.
