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East Timor Wants Shell Excluded From Sunrise Development Talks

JUNE 22, 2011

SYDNEY (Dow Jones)–East Timor is calling for Royal Dutch Shell PLC. (RDSB.LN) to be excluded from discussions about the development of the Greater Sunrise gas field, claiming its promotion of floating liquefied natural gas technology represents a conflict of interest.

East Timor has consistently opposed the use of a floating LNG vessel to develop the resource, which straddles its maritime border with Australia, preferring to have the gas piped to an LNG plant built on its coastline. Floating LNG is an untried technology that converts natural gas to a liquid on a vessel permanently moored at sea.

The Sunrise joint venture is operated by Woodside Petroleum Ltd. (WPL.AU). Shell and ConocoPhillips (COP) are also partners in the venture, which last year selected Shell’s floating LNG technology as the best way to develop the gas field.

“Shell cannot independently advocate for the best commercial advantage of the development of Greater Sunrise when Shell has a commercial conflict of interest,” East Timor’s Secretary of State Agio Pereira said in a statement.

“Shell decided on the FLNG option and then announced the order of the FLNG units before the debate had ever begun,” Pereira said.

Shell wasn’t immediately able to comment.

Last month, Shell internally approved construction of what could be the world’s first floating LNG vessel to develop its Prelude gas field off the northwestern Australian coast.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; [email protected]

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