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Will Sunrise see the light of the day?

2022/07/29
East Timors recently re-elected President José Ramos-Horta is struggling to find new financial sources as the 20-year old country 's Bayu-Undan gas field in Timor Sea which contributes about 85% of his government 's budget is nearing depletion.
East Timor’s recently re-elected President José Ramos-Horta is struggling to find new financial sources as the 20-year old country’s Bayu-Undan gas field in Timor Sea which contributes about 85% of his government’s budget is nearing depletion.
Bayu-Undan gas field supplies feedgas to the Australian 3.7 MMT/Y Darwin LNG plant.

 

The new government is reportedly looking for develop the untapped oil and gas reserves of the Greater Sunrise field, situated between East Timor and Australia and build a land-based gas processing and potentially liquefaction facilities at Tasi Mane.
The field’s operator Woodside has repeatedly delayed final investment decision on the field development and parked its integrated gas-to-LNG project on the backburner with no timeline. In July 2020, the Australian operator wrote down the carrying value of Sunrise to zero dollars.
However, Woodside has recently revealed that negotiating a PSC between Australia and East Timor has “been slow going but perhaps the current (energy) crisis help pick up the pace.”
Timor Gap’s CEO Antonio Sousa has said that his company intends to start producing natural gas from Greater Sunrise by 2028 or 2030 and hope to get the offshore project out of the limbo by finalizing a legal framework and production sharing contract (PSC) this year.

 

East Timorese government's insistence on development of the Sunrise field through the construction of a land-based gas processing and LNG production plant inside its own territory caused the golden opportunity to develop this field in the period of 2011-2012 to be lost, Mostafa Sharif Gas Market Senior Advisor has said, adding that "now a new opportunity window opened; however no one knows for how long and therefore the re-elected government has to take a more practical approach.”
Australian sources had earlier suggested that East Timor might reconsider sending the Sunrise gas to Santos-operated Darwin LNG plant rather than building an LNG plant itself but Sharif has reminded that as the shareholders of Darwin LNG plant and Sunrise venture are not the same, this plan would be complicated.

 

According to the Global LNG Database®, the Greater Sunrise field’s shareholders are East Timor’s government (Timor GAP) 56.56%, Woodside 33.44%, Osaka Gas 10.00%. ConocoPhillips has sold its 30% interest in the Greater Sunrise fields to the government in 2019 for $350 million and Shell has sold its 26.56% interest in the field for $300 million.

Meanwhile, China could be one of the interested countries for investing in the LNG development projects in East Timor as Chinese companies have been a big player in infrastructure investments in the country (e.g. South Coast Highway and Tibar Port).
The government intends to secure capital investment particularly from China for its proposed mega oil and gas processing infrastructure projects at Tasi Mane.

 

Last update: 29-Jul-2022

 

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Source(s) Global LNG Info Analytics, Map: AFG