East Timor pushes $5b hub for onshore gas processing

SYDNEY - East Timor, opposed to Woodside Petroleum's plan to develop the Sunrise gas project using a floating plant, has said it proposes a US$3.8 billion ($5.4 billion) oil and gas development hub on its southern coast.

Negotiations with Australia over the venture in the Timor Sea were continuing, Government spokesman Agio Pereira said. The southeast Asian nation said it expected to put forward its plan later this year.

Australia's second-largest oil and gas producer and its partners, including Royal Dutch Shell, have opted to rely on floating liquefied natural gas technology for the development, saying that it will deliver the most revenue to both Australia and East Timor. The Government of East Timor objects to any plan that does not include a gas-processing plant in the country.

Woodside had fulfilled all obligations governing the Sunrise project, the Perth-based producer said this month. The company said it ruled out piping the gas to East Timor because it was more expensive and that floating LNG was the best commercial option.

Piping the gas to East Timor for processing would cost billions more than the floating LNG option, Woodside chief executive Don Voelte said this month, and "presents significant technical risks".

- BLOOMBERG