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Shell’s FLNG technology chosen for greater sunrise project

Oilfield Technology,

Shell has been chosen as the preferred option to provide its FLNG technology to develop the gas fields in the East Timor Sea. It will operate the facility and manage the development and building of the FLNG project. Shell’s proprietary technology has already been used on its Prelude FLNG development in the Browse basin, Australia.

Shell has a 26.6% share in the joint venture along with ConocoPhillips (30%), Woodside (33.4%) and Osaka Gas (10%). The project is expected to produce up to 4 million tpa of LNG.

“Sunrise is a significant resource, but is remote and technically challenging, so Shell’s FLNG technology provides the best technical and commercial development option,” said Ann Pickard, Executive Vice President Upstream International Australia.

However, the decision has not yet received government approval, or a final investment decision. The other option was to build an undersea pipeline to transfer the gas to ConocoPhillips onshore LNG terminal at Darwin but this has now been ruled out.

East Timor has been pushing for an onshore terminal in East Timor itself, with the Timorese claiming it was feasible to build an undersea pipeline all the way to East Timor. This is in spite of the fact that the joint venture partners ruled it out as being unfeasible; on the grounds there was a deep underwater trench, which was too expensive to traverse a pipe across.

Unsurprisingly, the East Timor government has not reacted well to the joint venture's announcement, the Secretary of State for the Council of Ministers H.E. Agio Pereira said, "This is not only a source of concern but reflects an unacceptable level of arrogance." He went on to say, "The approach has significantly compromised future relations with the government of Timor-Leste."

The Woodside chief, Don Velte, responded, calling East Timor's reaction,"a bit premature, in the respect that we haven't even given them the proposal, or the very thick book of detail behind why we came to the decision."

Nonetheless, the joint venture partners will be holding talks with the east Timor officials in Dili next week, where hopefully, the issue can be resolved.

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