East Timor has signed a deal to buy ConocoPhillips’ stake in the giant Greater Sunrise offshore gas fields in the Timor Sea for $350 million.
The Greater Sunrise fields, comprised of the Sunrise and Troubadour gas and condensate fields, are located some 150 kilometers south-east of Timor-Leste and 450 kilometers north-west of Darwin, Northern Territory.
ConocoPhillips said on Monday the deal was conditioned on the Timor-Leste government receiving funding approval from the Timor-Leste Council of Ministers and National Parliament, as well as regulatory approvals and partner pre-emption rights.
ConocoPhillips will sell its 30 percent stake in the Woodside-operated project. Proceeds from this transaction will be used for general corporate purposes, the company said.
Matt Fox, ConocoPhillips’ executive vice president, Strategy, Exploration and Technology said: “We are pleased to reach an agreement mutually beneficial to the government of Timor-Leste and ConocoPhillips.”
“ConocoPhillips has a long history in Timor-Leste through our operated interest in the Bayu-Undan field. Although we differ with the government on its proposed development plan for Sunrise, we recognize the importance of the field to the nation of Timor-Leste, and the sale of our interest to the government gives them a working interest in this important development.”
The transaction is expected to close in the first quarter of 2019. Until then, the Sunrise Joint Venture partners are as follows: Woodside (Operator) with a 33.4% interest, ConocoPhillips (30%), Shell (26.6%) and Osaka Gas (10%).
The Sunrise fields were discovered in 1974 and hold gross (100%) contingent resources (2C) of 5.13 Tcf of gas and 225.9 million barrels of condensate. The development has been hampered by a dispute on the maritime border between Timor-Leste and Australia. On March 6, 2018, Timor-Leste and Australia signed their new Maritime Boundaries Treaty opening path for development of the Sunrise gas fields
Onshore LNG development?
Commenting on the deal between the Timor-Leste government and ConocoPhillips’ Wood Mackenzie’s analyst David Low said: “We believe the likely forward plan to monetise Sunrise is now through an onshore LNG development in Timor-Leste.”
Low said the development would require the construction of a new liquefaction plant and associated infrastructure; an FPSO to process and handle the condensate; construction of a pipeline connecting the FPSO to shore.
“Timor-Leste authorities are determined to harness the economic benefits of an onshore development. The Timor-Leste government is also pursuing the development of Sunrise to replace declining revenues from the mature Bayu Undan field.
“We believe the key onshore project risk is the construction of a greenfield LNG project in a country that has historically lacked large-scale infrastructure projects. The next step is for the project to put forward a viable development plan that all the project participants would be willing and happy to commit too,” Low said.
Offshore Energy Today Staff