In May, I wrote about plans in the tiny Indian Ocean island nation of Timor-Leste to develop a potentially massive natural gas resource that lies between its southern coast and the northern shores of Australia. First discovered in 1974, the Greater Sunrise Field is believed to contain sufficient volumes of natural gas to completely transform Timor-Leste’s economy in much the same way that revenues from offshore oil and natural gas development are currently transforming the economy of Guyana.
That prospect for transformative change, in fact, has had many observers referring to Timor-Leste as “the next Guyana.” No one questions that the potential is there, but now officials from Timor-Leste are striving to bring it into reality and finding the going rocky in some ways. Antonio de Sousa, President and CEO of Timor Gas & Petroleo (TIMOR GAP), traveled to the U.S. this week seeking support and solutions to some of the matters at hand.
One area of concern about which Mr. de Sousa is meeting with U.S. officials this week involves the projection of U.S. geopolitical interests in a part of the world in which the Chinese government has been aggressively asserting its hegemony. “I think there’s broad understanding that it’s very much within U.S. strategic interests for our company to produce this great field, but more than that, for our country to be prosperous and successful,” de Sousa told me when I caught up with him on Tuesday. “Because I think they realize that very few of these global partnerships and forms of collaboration can bear fruit if our country is denied the ability to develop its own resource base.”
One key issue regarding the development of the resource has to do with how the government’s share of the operational joint venture, in which TIMOR GAP owns a 56.56% interest, will be funded. Mr. de Sousa said TIMOR GAP is holding discussions regarding that part of the equation not only with U.S. officials, but with private sources of equity as well. While he is currently unable to name specific names, he told me that firm interest in filling this role has been expressed by “some of the biggest oil and gas companies.”
For TIMOR GAP, obtaining a firm source of financing is critical since the absence of it thus far has played a role in prolonging a point of controversy with the joint venture’s operating partner, Australia-based Woodside Energy. The issue surrounds the onshore terminus for the natural gas mainline that will ultimately transport production from the Greater Sunrise Field. Woodside Energy proposes to construct the line to an interconnection in Darwin, on the northern coast of Australia. TIMOR GAP, on the other hand, has consistently demanded that the line be constructed to a connection point along Timor-Leste’s southern coast.
De Sousa told me the point is not up for debate in his view. “The interesting thing for us, as a young country, is that we’re in a position to observe and potentially avoid others’ mistakes,” he said. “So that’s why the question of where to build the key infrastructure for this project has never been negotiable.”
A major reason why the longer route to Australia is unacceptable to TIMOR GAP is the company understands that its long-term prosperity depends not just on short-term gas-sale revenue, but on the second-order economic and social benefits that come from building a skilled and technical workforce from the ground-up, preparing future generations of Timorese not just to work on these projects, but to run them.
The company has further plans to construct a natural gas liquefaction and export facility that would enable it to export LNG to Indonesia and other nations in the region for coal-fired power plant conversions to natural gas and the resulting climate benefits. “The South Coast option is practically, technically, economically and strategically superior than any other plan being discussed,” de Sousa said, “And our company has done the technical work to prove that.”
While Mr. de Sousa believes that a decision to provide strategic support for the Greater Sunrise development represents a prime opportunity for the U.S. to firm up its geopolitical interests in the Indian Ocean region, he is confident that the resource beneath the ground will ultimately be recovered with or without American involvement and support. “I think it’s been independently acknowledged from a technical standpoint as a world-class resource basin.” he said. “And if history has taught us anything, it’s that world-class resource basins end up getting developed. The only question is when. With everything going on in the world today, and what we can expect for the immediate future, we believe the time is now.”
The opportunity is certainly there. Whether current U.S. leadership will decide to seize upon it as part of America’s ongoing geopolitical competition with China is anyone’s guess.