East Timor takes over Greater Sunrise gas project, buying out Woodside for up to $200 million

By Helen Clark

SINGAPORE, Oct 27 (Reuters) - East Timor has agreed to buy Woodside Energy's WDS.AX stake in the Greater Sunrise gas project for up to $200 million, paving the way to speed up development of the fields first discovered in waters off northwestern Australia more than 50 years ago.

Woodside, long the operator of the project, said it would sell its 33% stake to East Timor's national oil company, Timor Gap, including the titles containing the Greater Sunrise fields, which will make Timor Gap the 100% owner.

“We are now in a stronger position than ever to expedite the development of Greater Sunrise and advance the selection of the Timor LNG development concept, bringing us closer to realizing our nation’s long-standing aspiration of developing Greater Sunrise on Timor-Leste’s southern coast,” Timor Gap CEO Rui Soares said in a statement on Tuesday.

The two fields that make up Greater Sunrise are estimated to hold 5.1 trillion cubic feet of gas and 226 million barrels of condensate, a light crude oil typically found with gas.

TARGETING PRODUCTION IN 2034

In September, East Timor's petroleum minister said the earliest possible start of production from the project had been pushed back by two years to 2034.

“We certainly know Sunrise has the potential to deliver great value to Timor-Leste in the region. But it is a complex project, particularly a project of this scale, and it requires the appropriate development pathway,” Woodside CEO Liz Westcott told Reuters last week after the company’s third quarter earnings.

The transaction remains subject to conditions, including government, regulatory and joint venture approvals, with completion targeted for the first half of 2027, Woodside said.

"While Sunrise remains a high-quality resource, the transaction further simplifies Woodside's portfolio and allows capital and management attention to be focused on opportunities that present the greatest shareholder value," Westcott said in a statement on Tuesday.

In early September, entered an agreement to acquire Osaka Gas' 9532.T 10% interest in the project.

The Greater Sunrise project was first stalled by a long-running dispute between Australia and East Timor over the maritime border between the two countries and share of revenue from the project, which was resolved in 2018.

Since then, development has been held up as Woodside and the Timorese disagreed over whether the gas from the deepwater fields should be piped to a liquefied natural gas plant in Darwin, in northern Australia, or to East Timor.

Woodside's exit clears the way for Timor to pursue its ambition, essential for an economy currently dependent on a rapidly depleting petroleum fund built on revenue from another gas field, Bayu Undan, which is no longer producing.