Oil and gas project that promised Timor-Leste riches hasn't delivered | 7.30

The Unused Infrastructure of Timor-Leste: A Case Study of Greater Sunrise

Key Concepts: Greater Sunrise Project, Resource Nationalism, White Elephant Infrastructure, Onshore Processing, Woodside Energy, Maritime Boundary Agreement, Economic Multiplier Effect, Commercial Viability.

Introduction

This report details the situation surrounding the Greater Sunrise oil and gas project and the significant, yet largely unused, infrastructure built in Timor-Leste in anticipation of its development. The project, intended to transform one of Asia’s poorest nations, has stalled due to a combination of political factors, commercial realities, and strategic decisions. The focus is on the consequences of prioritizing national ambition over pragmatic economic considerations, resulting in substantial financial waste and unfulfilled promises to local communities.

1. The Scale of Unused Infrastructure

Timor-Leste’s coastal village of Souai exemplifies the situation. Constructed in 2017 at a cost of $120 million, entirely funded by the Timorese people, the Janatada Guzma International Airport remains largely empty. It was designed to accommodate passenger jets servicing the anticipated influx of workers for the Greater Sunrise project. Similarly, a four-lane expressway, built a decade ago by a Chinese consortium for $550 million, lies idle, connecting only two small villages and exhibiting significant structural damage in the form of sinkholes due to years of neglect. These represent substantial investments with no current return. Local resident Xiao Guzma notes the situation bluntly: “You just wash money there. No benefit the until now is team empty.”

2. The Greater Sunrise Project & Timor-Leste’s Vision

The Greater Sunrise field is a multi-billion dollar oil and gas project located in the Timor Sea, shared between Timor-Leste and Australia. The core issue revolves around where the gas should be processed. The Timorese government, under the long-standing leadership of Prime Minister Xanana Gusmão (since 2004), has consistently advocated for onshore processing in Timor-Leste. Gusmão stated unequivocally, “The natural gas from great sunrise must be processed on shore in Tim.” This stance is rooted in resource nationalism – the belief that a nation should control its natural resources for its own benefit. Oil and gas analyst Saul Kavonic explains the rationale: “If you can get a big resource project like an LG project built on shore, there are economic multiplier benefits for the nation which go well and beyond the value of the project or the taxes directly from that project.” However, this vision requires significant investment and carries substantial risk.

3. The Role of Political and Strategic Considerations

Muted Silva, from a local civil society organization, criticizes the government’s approach, stating it was “unrealistic” to fund infrastructure before finalizing a deal, lacking consideration for Timor-Leste’s implementation capacity. The insistence on onshore processing is also linked to the political influence of key figures in Timor-Leste, as highlighted by Kavonic: “This is beyond just economics. This is about resource nationalism. This is about uh the politics and the personalities of very influential people in Tymore.” The government’s commitment to developing its own oil and gas industry, despite the challenges, is a central driver of the current situation.

4. The Recent Agreement with Australia & Woodside’s Position

In a recent agreement signed with Australia, Prime Minister Anthony Albanese committed to donating one-third of Australia’s royalties from Greater Sunrise to Timor-Leste, potentially amounting to billions of dollars. However, Albanese remained non-committal regarding the location of gas processing, stating, “We will work through uh these issues in a constructive way…we acknowledge that there is commercial issues involved.”

Woodside Energy, which owns one-third of the Greater Sunrise project, announced a cooperation agreement in November to explore piping the gas to Timor-Leste, with a potential timeline of 2032. However, Kavonic asserts that Woodside does not prioritize this project, citing increased competition in the LNG market and the availability of lower-cost alternatives: “The truth is Woodside does not see this as a priority project for them. No oil and gas company in the world does.”

5. Potential Outcomes & Risks

Kavonic outlines three potential scenarios:

• Timor-Leste concedes: Allowing the gas to be piped to existing infrastructure in Australia.
• Australian Government Support: Timor-Leste leveraging the threat of Chinese investment to secure support for onshore processing.
• Independent Gamble: Timor-Leste proceeding alone, essentially betting the national economy on a single LNG project without a proven operator. Kavonic deems this last option “exceptionally risky.”

6. Impact on Local Communities

The lack of progress has directly impacted local communities. Jewan Guzmau, a resident of Souai, explains that his community was relocated to make way for the airport and highway, and they have yet to see the promised benefits. The situation highlights the disconnect between national-level strategic decisions and the lived realities of Timorese citizens.

Conclusion

The case of the Greater Sunrise project and the unused infrastructure in Timor-Leste serves as a cautionary tale. While resource nationalism and the desire for economic independence are understandable, prioritizing these goals without a realistic assessment of commercial viability and implementation capacity has resulted in significant financial waste and unfulfilled promises. The future of the project hinges on a pragmatic approach that balances national aspirations with economic realities, potentially requiring compromise on the location of gas processing and securing reliable investment partners. The current situation represents a “white elephant” – a costly investment that delivers little to no benefit – and underscores the importance of careful planning and realistic expectations in large-scale infrastructure projects.