The signing of a landmark sea boundary treaty between Australia and Timor-Leste is set to revive stalled discussions over the lucrative Sunrise gas project, but operator Woodside Petroleum immediately signalled that the tough work on agreeing how to develop the resource is still to come.
Woodside said it is "disappointing" the conciliation process over boundaries and Sunrise failed to strike a deal on the development design after the treaty apparently ruled out its favoured option of a floating LNG plant.
The treaty, signed in New York on Wednesday Australian time by senior ministers of the two nations, represents a major shake-up in the administration of oil and gas fields in the Timor Sea.
It will do away with the long-standing Joint Petroleum Development Area, a region jointly administered between the two nations, shifting resources in that area wholly into Timor-Leste territory.
But most significantly for Woodside, the terms of the deal only cover two onshore options – either Timor-Leste or Darwin – for processing the 5.13 trillion cubic feet of gas from the large Sunrise field. The venture, in which Shell and ConocoPhillips are major partners, also involves about 226 million barrels of oil-like condensates.
The idea of offshore processing through a circa $US13 billion ($16.6 billion) floating LNG plant, the concept most recently favoured by Woodside, is not covered in the treaty nor in the Permanent Court of Arbitration's conciliation agreement. The treaty was agreed after a long-running dispute on sea boundaries between the two nations which forced the Sunrise partners to put their project on the back burner several years ago.Read more here.
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