News - East Timor hopeful $10bn LNG terminal could go ahead

East Timor energy minister Alfredo Pires has said that he is optimistic that the results of a new gas pipeline study performed in conjunction with Petronas could pave the way for the construction of a US$10 billion LNG facility in the Asian nation.

Speaking to Reuters following a meeting with Petronas head Hassan Marican and Prime Minister Xanana Gusmao, Mr Pires said that, while they were still waiting on the results of the second phase of the study of the potential pipeline to the Greater Sunrise gas field in the Timor Sea, "the first phase encourages the government and Petronas to start discussing how to finance the LNG project."

Mr Pires said that the government was already exploring a deal with a South Korean consortium to buy the gas produced by the potential field, and estimated that the plant could be constructed at a cost of between US$8 billion and US$10 billion.

Australian company Woodside Petroleum had previously explored the possibility of building such a pipeline, but rejected after its studies showed it not to be a commercially attractive proposition.

However, the company still holds a 33.4 per cent stake in the Sunrise LNG project, in partnership with ConocoPhillips, Royal Dutch Shell and Osaka Gas, and told Reuters that it will make its decisions on the pursuit of investments in the area over the course of 2009.

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