TIMOR GAP, Woodside Energy Detail Greater Sunrise Field Plans At OTC

The Offshore Technology Conference (OTC) hosted a bit of history in Houston last week, as representatives of the Timor-Leste national oil company, TIMOR GAP, and Australia-based Woodside Energy appeared on stage together for the first time to discuss a major offshore natural gas opportunity. In a panel discussion I had the honor of moderating, Andy Drummond, Executive Vice President of Exploration and Development at Woodside, and TIMOR GAP CEO Antonio de Sousa laid out recent progress and discussed next steps required to proceed with development of the Greater Sunrise natural gas field before an audience of OTC attendees.

Mr. de Sousa made his first journey to the United States during the OTC event in 2022, where he laid out his country’s plans for future development of the natural gas resource but was alone in doing so. First discovered almost half a century ago in 1974 in the Timor Sea waters that lie between Timor-Leste and the northern coast of Australia, Greater Sunrise is believed to contain 5.1 trillion cubic feet of natural gas and 226 million barrels of condensate, making it one of the largest discovered but undeveloped oil and gas resources in the Asia Pacific region.

For Timor-Leste and its 1.3 million citizens, the potential revenues, jobs and economic impact accruing from the development of the resource could become transformational in a way similar to what is now happening in the South American country of Guyana due to the development of the prolific offshore Stabroek block. A high percentage of the Timor-Leste population is under the age of 25 and well-paying professional jobs like those that would be created by a Greater Sunrise Field development project are currently scarce.

After years of negotiations and uncertainty, TIMOR GAP and Woodside Energy have developed a joint plan for the development of the Greater Sunrise fields for the benefit of both countries and the surrounding region, with Woodside as operator, and with Japanese company Osaka Gas as a minority partner. It’s an integrated plan with an array of moving parts that will require high levels of commitment, stakeholder engagement, sophistication and cooperation between the companies and nations involved in the coming years. Requirements for local content and protection of indigenous rights are key elements of the plan, and both Drummond and de Sousa reaffirmed their companies’ commitment to ensuring their execution.

With so much focus today on carbon and methane reduction and other ESG-related considerations, both companies also affirmed their commitment to environmental protections in their operations. Drummond emphasized that adherence to the highest environmental standards is an integral part of all Woodside operations.

TIMOR GAP’s preferred plans go far beyond just producing and selling the natural gas and condensate. They also include plans to create a Timor-Leste-sited LNG export facility for part of the gas, as well as plans to use a large share of the gas to reduce emissions in the island’s power generation, which today comes from the burning of diesel. The joint venture plans to integrate both solar and wind power into the provision of electricity for its operations, along with a plan for a carbon capture and storage project targeting another field called the Bayu-Undan.

Several points of disagreement between the partners remain, including the initial destination for the natural gas once production begins. This is key since the destination of the production will largely determine where and how the gas and condensate are used and its secondary destinations after being processed. In February, Woodside CEO Meg O’Neill said that new technologies, including modular LNG systems, hold the potential to speed up the timeline for the field’s development. Mr. de Sousa noted that the availability of these units would make the development of an LNG export facility based in Timor-Leste less expensive, thus improving the economics of the case for directing the production to the island.

“Against a backdrop of global geopolitical instability and constrained energy supply chains, there is an opportunity for the Sunrise Joint Venture to significantly advance this regionally important project,” Ms. O’Neill said.

The partners have established an independent concept selection study to resolve the remaining planning points needing resolution. That study is scheduled for completion in the next six months, and both Drummond and de Sousa expressed optimism the project could then move to final investment decisions and get underway shortly thereafter.

“We welcome this change of approach from Woodside and appreciate Mrs. O’Neill’s ongoing efforts to make sure all partners continue working closely together,” de Sousa said during the panel discussion at OTC. “It is crucial for us to maintain trust and good faith in how we move forward with this project.”

It has been a long and winding road over 49 years getting to this point of trust and good faith between all parties involved in the Greater Sunrise project. Everyone involved no doubt hopes it can be maintained and the project can move ahead when the independent concept selection study is completed this fall. If it can, then last week’s joint appearance between these two key players can be remembered as a key, even historic, step along the way.