THE SQUIZ

Just as Australia’s delicate relationship with the Solomon Islands reemerged as an issue, another close neighbour is taking centre stage with the Albanese Government signing a new Defence Cooperation Agreement with Timor-Leste. The deal was outlined by President José Ramos-Horta in Canberra yesterday, and it covers increased military cooperation, particularly in the Timor Sea. But it was a mixed bag as Ramos-Horta suggested he would consider financial support from China if Australia didn’t do more to support his country’s flailing economy, and he called out one particular project that’s been a source of tensions between our nations for almost 20 years. 

WHAT’S THAT ABOUT?

Deep under the sea, 450km north-west of Darwin/150km south of Timor-Leste lies a liquified natural gas reserve worth an estimated $70 billion. Known as the Greater Sunrise field, the project is operated by energy giant Woodside, but has been at a standstill in recent years amid an ongoing row over where the gas should be processed. Ramos-Horta insists a processing plant must be built on Timor-Leste’s south coast to create jobs and economic prosperity for its impoverished citizens, but Woodside argues the only way the project is viable is by processing the gas in Darwin where the infrastructure already exists. Oil and gas accounts for 80-90% of Timor-Leste’s government revenue, and it’s consistently said it needs more from the project to support their fledgling nation. Their existing Bayu-Undan offshore gas field is due to run out this year, which would decimate their economy and could see them run out of cash within 10 years.

SO WHAT NOW?

While Ramos-Horta told ABC TV’s 7.30 that he would not allow China or any “hostile power” to establish a military base in Timor-Leste, he was also keen to point out that his nation is more strategically important than the Solomon Islands given its close proximity to Australia and Indonesia. He also stated that a “prosperous, stable Timor-Leste is in Australia’s best interests”, and asked Australia and Woodside to “extend the hand of friendship” as it’s unlikely Timor-Leste would be able to pay for the big investment required to build a processing facility. The war in Ukraine has also significantly raised international gas prices, making Greater Sunrise more attractive to potential investors like China, which already has significant infrastructure projects underway in Timor-Leste. It raises some new/important questions about our regional security for Foreign Minister Penny Wong to add to her to-do list… She wants Ramos-Horta to talk to her directly, not through the media.