East Timor Urges Australian PM to Support Development of Gas Pipeline

Timor-Leste President José Ramos-Horta meets with then-Leader of the Opposition Peter Dutton in Parliament House in Canberra, Wednesday, May 1, 2019. AAP Image/Mick Tsikas

East Timorese President Jose Ramos Horta has urged Australian PM Anthony Albanese to publicly support the development of a gas pipeline in the Timor Sea following Woodside Energy’s new position on the project.

This follows a diplomatic stoush in August that saw Ramos-Horta say that his island country would turn to China if Woodside Energy continued with its preference to direct gas through the northern Australian city of Darwin.

“Prime Minister Anthony Albanese has not said a word whether he agrees or not with the pipeline coming to Timor-Leste,” Ramos-Horta told Bloomberg in Singapore on Dec. 9. “He’s very sympathetic, but so far in regard to the development of the gas field called Greater Sunrise, we have not seen any change of attitude on the part of Australia.”

The Greater Sunrise gas fields are located approximately 450 kilometres (280 miles) northwest of Darwin and 150 kilometres south of Timor-Leste. It is estimated to be worth around $70 billion (US$50 billion) and holds around 226 million barrels of gas.

The Albanese government has said it is officially neutral on the gas processing plant’s location but is eager for a deal to be finalised between East Timor’s Timor Gap and Woodside.

Meanwhile, Woodside Energy chief executive Meg O’Neill has said that the company would reassess its position on the viability of building a gas pipeline directly to East Timor.

“We feel it’s appropriate to reopen the concept evaluation,” O’Neill said, adding that new technology such as modular Liquified Natural Gas (LNG) would challenge the previous view that the only commercially feasible option was to get the gas in Darwin, reported the Australian Financial Review (AFR).

Ramos-Horta has welcomed O’Neill’s comments saying that she showed “greater management wisdom than her predecessors by stating that the Timor-Leste option should be put on the table even if there are concerns about costs. These concerns can be discussed and resolved.”

Following the resolution of a maritime border dispute between East Timor and Australia, discussions on how resources in the Greater Sunrise gas fields were revived with a treaty in 2018. However, the treaty is still to be finalised.

China as Bargaining Chip in Negotiations

The development of a gas pipeline in the Greater Sunrise gas fields has been a point of contention between the two countries since 2004.

Ramos-Horta previously told The Guardian that his country would consider Chinese investment if “other development partners,” such as Australia, refused to invest in the development of a pipeline to East Timor, or Timor Leste.

Beijing’s growing influence in the pacific has been concerning for Australia, given a recent security deal made between the Solomon Islands and the communist regime.

Nevertheless, the president argued that his country would be on a “financial cliff” if the Greater Sunrise project is not operating within the next 10 years.

This prompted a visit to Dili in September by Australian Foreign Minister Penny Wong, who called on her counterparts to engage in quiet diplomacy. Wong also met with Timor Leste, Minister of Foreign Affairs Adaljiza Magno.

She said that the Australian government recognised that Greater Sunrise was “an extremely important project for Timor-Leste,” and it was “important to recognise the joint venture partners come to the table and agree on a path forward.”

“So, that’s Timor Gap, Woodside, and Osaka Gas. And, as yet, that hasn’t happened,” she said. “I’ve said to the president and to others, we need to unstick it; we need to see how a way through can be found. What I would say is that will be best done respectfully and directly—not through the media.”

Pipeline Just Like ‘Any Other Investment’

However, Ramos-Horta said that the proposed Chinese investment “was like any other business investment,” he told ABC.

“It is just a pipeline, and the Chinese would be an investor like Australia would be, like South Korea would be, and it wouldn’t be entirely a Chinese option. We have Indonesia. Indonesia is a serious potential partner in the development of Greater Sunrise,” he said.

“Australia is a strategic partner of Timor-Leste, but having close ties with China, particularly in enabling the development of Greater Sunrise, is not a security threat to Australia, is not Chinese maritime naval base in Timor-Leste.”

While East Timor controls 57 percent of the field and is entitled to at least 70 percent of the royalties—with Australian energy company Woodside controlling 33 percent, and Japan’s Osaka Gas 10 percent—Ramos-Horta said his country would run out of money in a decade if the project did not proceed.

“It could be catastrophic,” he told the ABC. “We’d need to have Greater Sunrise operational commercially, maximum within the next seven, eight years. So we have to make a decision by the end of this year.”

The current Bayu-Undan oil and gas field in the Timor Sea is expected to be exhausted this year.

Meanwhile, the island country is expected to exhaust its $US18 billion sovereign wealth fund—which funds the majority of its revenue and expenditure—by 2030.

Victoria-Kelly Clark contributed to this report.