Reuters – Saturday, May 1
* Woodside says East Timor reaction premature, posturing
* East Timor slams Woodside for “arrogance”; opposes plan
* Woodside CEO to travel to Dili next week to meet officials
* East Timor, Australia to hold talks in Dili on May 14
PERTH/DILI, April 30 – Woodside Petroleum Ltd said the East Timor government’s opposition to its development plan for a major offshore gas field in the Timor Sea was premature, and that it would visit Dili next week to explain the merits of the plan.
Woodside on Thursday said venture partners for the multi-billion dollar Sunrise liquefied natural gas project want to develop the field using a floating liquefaction platform, drawing stiff opposition from the East Timor government, which also accused Woodside of exhibiting an “unacceptable level of arrogance”.
The Greater Sunrise field contains an estimated 5.13 trillion cubic feet of gas and straddles Australian and East Timorese waters. Dili wants the gas developed on its shores, while Canberra has not declared a preference.
“We will be going to East Timor next week to show them the full proposal … we will get them to read the proposal and then evaluate it,” Woodside Chief Executive Don Voelte told reporters after the annual general meeting.
Voelte said the floating LNG plan was the most compelling and would bring more revenue to the citizens of East Timor than any other option.
The venture would also commit to employing and training some people from East Timor, and help the impoverished nation build a new resource industry onshore.
Australia and East Timor reached a deal four years ago to evenly split billions of dollars of field royalties, but East Timor’s President Jose Ramos-Horta had wanted jobs from processing to be based in the impoverished country.
Woodside ruled out building a liquefaction plant onshore, citing high costs and technical risks of building a pipeline across a deep ocean trench — arguments disputed by East Timor.
In a strongly worded statement, East Timor on Friday said it would not approve the Sunrise joint venture’s floating LNG plan “now or in the future” and said Woodside’s announcement was “a waste of valuable time”.
“Woodside was acutely aware of the governments’ position before the announcement; but chose to proceed regardless. This is not only a source of great concern, but reflects an unacceptable level of arrogance,” Secretary of State for the Council of Ministers, H.E. Agio Pereira, said in a statement.
Woodside’s Voelte dismissed those comments as “posturing”.
East Timor’s Foreign Minister, Zacarias Albano da Costa, said his government would discuss the issue with Australia’s Foreign Minister, Stephen Smith, during an official visit to Dili in May.
“I don’t want to comment much on the option. We have put it in the agenda to discuss that issue during a meeting in Dili, East Timor, on May 14,” da Costa told Reuters.
Da Costa reiterated his government’s commitment to an East Timor-based LNG plant.
Floating LNG technology owned by Royal Dutch Shell , is untried anywhere in the world, but Shell said the technology has undergone vigorous testing and it plans to use the first of the nine ships it is building on its wholly-owned Prelude field off western Australia.
Partners in the Greater Sunrise field are U.S. major ConocoPhillips , Shell and Japan’s Osaka Gas . (Reporting by Fayen Wong in Perth; Tito Belo in Dili; Editing by Sara Webb and David Fox)
