Sun Setting on Timor-Leste’s Greater Sunrise Plan

Apr 2, 2018 | Clive Schofield and Bec Strating
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On 6 March 2018, Australia and Timor-Leste signed a landmark treaty that draws permanent maritime boundaries in the Timor Sea. The treaty is the result of the United Nations Compulsory Conciliation (UNCC) processes that have facilitated negotiations between the two states for over a year. This represents an important symbolic victory for Timor-Leste, as Australia had been reluctant to establish permanent maritime boundaries. This does not mean that the Timor Sea saga is over. Maritime boundaries are only one aspect in this complex set of disputes. Still to be determined are whether gas from the Greater Sunrise complex of gas fields in the Sea is piped to Timor-Leste or Australia for processing, and this decision will, in turn, dictate the revenue split. The new treaty provides two options for the development of Greater Sunrise with a different split in revenues depending on which direction the pipeline runs. If the pipeline goes to Timor-Leste, Australia will receive 30 per cent of the upstream revenue arising from the development. Should the gas be pumped to Darwin, Australia will get only 20 per cent of the upstream revenue. This ‘extra’ 10 per cent of upstream revenue that Timor-Leste would receive if it loses the pipeline has been estimated to be worth US$3.1–3.5 billion.