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East Timor invest $800 million in gas pipeline

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East TimorEast Timor offered to invest $800 million to build a pipeline to import gas from the Timor Sea. The new pipeline would resolve a dispute with Woodside Petroleum over fields development.


East Timor has insisted for a decade that a liquefied natural gas plant to process gas from the Greater Sunrise fields should be built on its shores, bringing with it much-needed development. Australia's Woodside Petroleum said the plan is uneconomical and wants to use a floating LNG plant.

Industry insiders say the chance of a near-term breakthrough remains slim, despite the new gambit. That is partly because East Timor also wants to unpick a revenue-sharing agreement after accusing Australia of engaging in espionage when the treaty was struck, writes Jakarta Globe.

Australia will not confirm or deny the allegations, but has said the accusation is not new. East Timor has filed for arbitration and if it overturns the treaty, it could open up discussions on a disputed maritime border, risking further delays to the project.

East Timor Secretary of State for Natural Resources Alfredo Pires said Dili is prepared to invest $800 million in a pipeline to help move things forward, using funds from its $14 billion Petroleum Fund.

Soaring costs and the prospect of competition from US shale gas to supply Asia customers have already threatened the future of a number of LNG projects around Australia.

Woodside has previously estimated that an onshore plant in East Timor would add as much as $5 billion to analysts' $12 billion cost forecast to develop the fields using floating LNG.

East Timor says a project using an onshore plant would cost $12 billion to $13 billion and that floating LNG faces a greater risk of cost blowouts because it is a new technology.

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