By OGJ editors
HOUSTON, Mar. 6 -- Australian officials and the newly independent East Timor have signed the Timor Sea Treaty which covers natural gas to be produced from Bayu-Undan field in the Joint Petroleum Development Area (JPDA), shared by the two countries.
Australia's Parliament ratified the long-awaited treaty last week and Australia Foreign Minister Alexander Downer signed the agreement on Mar. 6 with East Timor Prime Minister Mari Alkatiri in Dili, East Timor's capital.
The two officials also signed an International Unitization Agreement (IUA) for Greater Sunrise gas fields. The Sunrise project is planned as the world's first floating LNG plant (OGJ, Mar. 10, 2003, p. 56). Greater Sunrise is made up of the Sunrise, Sunset, and Troubadour fields.
"The treaty and the IUA will deliver operational certainty for the Bayu Undan and the Greater Sunrise joint venture partners," said Australian Resources Minister Ian Macfarlene. "With goodwill on both sides, the governments have delivered, and it's now time for these companies to step up to the line."
Bayu-Undan joint partners are ConocoPhillips, Santos Ltd., ENI SPA unit Agip SPA, and Tokyo-based Inpex Corp. Greater Sunrise partners are Woodside Petroleum Ltd., Osaka Gas Corp., Shell Development (Australia) Pty. Ltd., and ConocoPhillips.
Macfarlene said he would assist with gas marketing during a trip he plans to China, South Korea, and Japan.
Darwin LNG Pty. Ltd., a unit of Phillips Petroleum Co. (now ConocoPhillips), last year signed a 17-year heads of agreement with Tokyo Electric Power Co. Inc. and Tokyo Gas Co. Ltd. for the sale of 3 million tonnes/year of LNG.
The LNG, exported from a proposed liquefaction plant and export terminal at Darwin, Australia, would be fed by natural gas to be produced from Bayu-Undan field. Gas deliveries are expected to begin in late 2005, with fob shipments of the first LNG cargoes expected to begin in January 2006. The agreement commits nearly 100% of the field's 3.4 tcf of natural gas, Phillips said (OGJ, Mar. 18, 2002, p. 8).
The Bayu-Undan gas project has been long delayed over governmental issues and by earlier partner differences. In late 2001, Phillips approved construction of a $1.5 billion pipeline to carry gas from the field to northern Australia (OGJ, Jan. 7, 2002, p. 8).
The total development, including the pipeline and LNG plant construction, is expected to cost $3 billion.
Gas reserves being developed in the Greater Sunrise fields are covered by a letter of intent Phillips and El Paso Corp. signed about 2 years ago (OGJ, Apr. 9, 2001, p. 62).
El. Paso agreed to purchase LNG from the Darwin plant under a long-term contract beginning in 2005. The Timor Sea LNG would be regasified and marketed via an LNG terminal to be sited somewhere in southern California or Mexico's Baja California peninsula.
