Timor-Leste expects to sign first Greater Sunrise gas agreements early next year, Ramos-Horta says

Timor-Leste President José Ramos-Horta said his country expects to sign the first agreements for the Greater Sunrise gas project early next year, in an interview with the ABC in Sydney published on Sunday.

“I was told by Prime Minister Xanana [Gusmão] that he’s confident that within the next few months they will sign the agreement, [that] we will finalise the three main documents,” Mr Ramos-Horta said. He said the project was “finally happening” after “years and years of procrastination [and] deadlock”.

Timor-Leste’s government has said negotiators from the two countries reached technical agreement in Canberra on three documents: a petroleum mining code, a production sharing contract and a fiscal regime. Mr Ramos-Horta said they would be signed after being checked and approved by both governments and Woodside Energy, which owns a third of the project, the ABC reported.

Timor-Leste wants gas from the fields piped to its south coast for a liquefied natural gas plant. The ABC reported that analysts, as well as government and industry sources, said there was still no guarantee Timor-Leste and Woodside would agree on a development plan, and that a final investment decision was likely years away.

Woodside and Timor-Leste’s government said last year that the first LNG from Greater Sunrise may be produced “as early as 2032-2035, subject to concept selection and investment decisions”. Timor-Leste’s petroleum minister last month put the start at 2034-2035, with a final investment decision targeted by 2029, according to the ABC.

Timor-Leste relies heavily on its Petroleum Fund, which holds $26 billion, the ABC reported. The Bayu-Undan gas field, a major source of the fund’s revenue, ceased production last year, and the International Monetary Fund warned last year that the fund could be depleted by 2038 if it continues to be used to finance budget deficits without being replenished.

Timor-Leste has told the Australian government it could turn to Chinese investors if it cannot reach agreement with Woodside, according to the ABC.

Mr Ramos-Horta said he was confident Woodside was “determined to follow through” with the project to pipe gas to Timor-Leste. “It’s beneficial to Woodside, beneficial to Australia, beneficial to Timor-Leste,” he said.