Woodside Petroleum is believed to have ruled out a $15bn East Timor LNG export plant to process output from its Greater Sunrise fields, citing the disadvantages of a commercially unattractive project.

A Woodside spokeswoman said recently that the Perth company had told East Timorese authorities a local plant was not commercially attractive and it would instead focus on piping gas to Darwin, or building a floating LNG plant.

East Timor’s Natural Resource Secretary of State, Alfredo Pires, is reported to have said the decision would be a ‘major problem’ for the Government.

Pires noted that he had not been informed of the decision and the Government, which had to approve the Sunrise project, would still push hard to for an East Timor plant. Pires said he was more than hopeful an LNG plant would be built in East Timor.

After delaying the project since 2004 until fiscal and legal certainty could be obtained, Woodside re-staffed the project late last year.

The Greater Sunrise fields straddle the boundary of the Joint Petroleum Development Area of the Timor Sea and while Woodside had previously said the East Timor plant was the least preferred of three options, it has now revealed that it is no longer being considered.

“Floating LNG is the most attractive in-field option and Darwin is the most commercially attractive onshore option for Sunrise,” a Woodside spokeswoman is quoted as saying.

While both the Timorese and Australian governments need to approve the project, Woodside is pointing to treaty arrangements that specify the reservoir needs to be developed to the best commercial advantage in accordance with best oilfield practice.

The company indicated it planned to make a final decision on the best way to develop the field in the first half of next year, with a view to a final investment decision later in the year.

Woodside has not said how much the project is expected to cost but Pires said developing the project with an East Timor plant would cost around $15bn.

The Darwin option, which would require a 530km pipeline, would hook up to a plant next to the ConocoPhillips LNG plant at Wickham Point.