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NASDAQ -Jun 4, 2010
SYDNEY -(Dow Jones)- East Timor on Friday hit back at claims by Woodside Petroleum Ltd. (WPL.AU) that a floating LNG platform would be cheaper to build than an onshore plant in East Timor to process gas from the Greater Sunrise field.
East Timor spokesman Agio Pereira described as "grandiose platforming" Woodside Chief Executive Don Voelte's assertion at a conference Thursday that a floating platform would be A$5 billion cheaper to build.
Perth-based Woodside and partners including ConocoPhillips (COP) and Royal Dutch Shell PLC (RDSB.LN) want to process gas from the field, which straddles Australian and East Timorese waters, on a floating LNG vessel. East Timor is concerned about the untried nature of floating LNG technology and says an onshore plant will generate greater benefits to the East Timorese people.
In a statement, Pereira also described Voelte's claim that it has lodged a development plan to East Timorese authorities as "preposterous". He said Woodside has no documentation for receipt of lodgement and that an independent U.S. lawyer who witnessed a meeting between two Woodside representatives and government authorities "has confirmed via an affidavit that the plan was rejected because of non-compliance cited by regulators".
Woodside has said that separate concept studies were provided to authorities for each development option but East Timor said it wants alternatives examined through "independent concept screening".
It reiterated that it is suspicious about the Sunrise JV recently downsizing the field's estimated resource size to 5.1 trillion cubic feet of gas from earlier 8.5 tcf estimate. Floating LNG vessels are more suitable for smaller, stranded gas resources.
Voelte reiterated yesterday that Woodside has assessed that a floating LNG vessel would generate more revenue, not just for the JV but for East Timor. He added that based on the JV's modelling assumptions, development of Greater Sunrise will generate about US$13 billion in royalties for East Timor over the life of the project and about US$19 billion for Australia.
Pereira said economic benefits from an onshore plant and its associated pipeline, LNG processing and "subsidiary industries" are estimated to be "five to 13" times Voelte's estimates.
Woodside and its partners need approval from both the Australian and East Timorese governments before they can develop the resource.
Voelte said Thursday that an onshore East Timor plant would require a new LNG loading jetty, extensive site clearing and preparation, and basic infrastructure like an airport, water and sewerage. There's also "significant technical risks", including operating the pipeline across the seismically active subsea Timor trench.
In light on these issues, Voelte said it became apparent to the Sunrise JV that a floating LNG option better satisfied the commerciality test requirement under the International Unitization Agreement, which he said is a clear set of rules established for the development of Greater Sunrise.
-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com
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NASDAQ -Jun 4, 2010
SYDNEY -(Dow Jones)- East Timor on Friday hit back at claims by Woodside Petroleum Ltd. (WPL.AU) that a floating LNG platform would be cheaper to build than an onshore plant in East Timor to process gas from the Greater Sunrise field.
East Timor spokesman Agio Pereira described as "grandiose platforming" Woodside Chief Executive Don Voelte's assertion at a conference Thursday that a floating platform would be A$5 billion cheaper to build.
Perth-based Woodside and partners including ConocoPhillips (COP) and Royal Dutch Shell PLC (RDSB.LN) want to process gas from the field, which straddles Australian and East Timorese waters, on a floating LNG vessel. East Timor is concerned about the untried nature of floating LNG technology and says an onshore plant will generate greater benefits to the East Timorese people.
In a statement, Pereira also described Voelte's claim that it has lodged a development plan to East Timorese authorities as "preposterous". He said Woodside has no documentation for receipt of lodgement and that an independent U.S. lawyer who witnessed a meeting between two Woodside representatives and government authorities "has confirmed via an affidavit that the plan was rejected because of non-compliance cited by regulators".
Woodside has said that separate concept studies were provided to authorities for each development option but East Timor said it wants alternatives examined through "independent concept screening".
It reiterated that it is suspicious about the Sunrise JV recently downsizing the field's estimated resource size to 5.1 trillion cubic feet of gas from earlier 8.5 tcf estimate. Floating LNG vessels are more suitable for smaller, stranded gas resources.
Voelte reiterated yesterday that Woodside has assessed that a floating LNG vessel would generate more revenue, not just for the JV but for East Timor. He added that based on the JV's modelling assumptions, development of Greater Sunrise will generate about US$13 billion in royalties for East Timor over the life of the project and about US$19 billion for Australia.
Pereira said economic benefits from an onshore plant and its associated pipeline, LNG processing and "subsidiary industries" are estimated to be "five to 13" times Voelte's estimates.
Woodside and its partners need approval from both the Australian and East Timorese governments before they can develop the resource.
Voelte said Thursday that an onshore East Timor plant would require a new LNG loading jetty, extensive site clearing and preparation, and basic infrastructure like an airport, water and sewerage. There's also "significant technical risks", including operating the pipeline across the seismically active subsea Timor trench.
In light on these issues, Voelte said it became apparent to the Sunrise JV that a floating LNG option better satisfied the commerciality test requirement under the International Unitization Agreement, which he said is a clear set of rules established for the development of Greater Sunrise.
-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com
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Dow Jones Newswires
06-04-100343ET
Copyright (c) 2010 Dow Jones & Company, Inc.
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06-04-100343ET
Copyright (c) 2010 Dow Jones & Company, Inc.
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