East Timor President Signals imminent Deal on Greater Sunrise Gas Field as Country Faces Energy Cliff

East Timor is running out of time. The small Southeast Asian nation's only producing gas field went dark in 2025, and its economic lifeline now depends on reaching an agreement with Australia to develop the Greater Sunrise field, one of the region's largest untapped energy reserves.

President Jose Ramos-Horta said in an interview on June 11 that a deal to develop Greater Sunrise could be finalized as early as next month. The field, located in the Timor Sea between the two nations, holds an estimated 5.1 trillion cubic feet of gas and 225 million barrels of condensate, according to previous government estimates.

The Stakes for East Timor

The urgency is real. East Timor's Bayu-Undan field, which accounted for roughly 90% of government revenue at its peak, stopped producing in 2025 after two decades of operation. The field once generated over $2 billion annually for the tiny nation of 1.3 million people, funding everything from infrastructure projects to the country's sovereign wealth fund.

Without a replacement revenue source, East Timor faces a fiscal crisis. The government's petroleum fund, which held approximately $19 billion at its peak, has been drawn down significantly as Bayu-Undan's output declined. Economists have warned that without new revenue streams, the fund could be depleted within a decade.

Greater Sunrise represents the best remaining option. The field sits in a disputed maritime zone, and its development has been stalled for years by disagreements over where the gas should be processed, who gets what share of revenue, and how the boundaries should be drawn.

The Australia Dynamic

The negotiations are complicated by history. East Timor won independence from Indonesia in 2002, and relations with Australia have been strained ever since over maritime boundaries and resource sharing. In 2018, the two nations signed a treaty establishing a special regime for Greater Sunrise, but the commercial terms remained unresolved.

Australia has its own incentives to reach a deal. The country's east coast gas market is tightening, and new supply sources are increasingly valuable as domestic demand grows and export contracts multiply. Greater Sunrise gas could be piped to existing liquefied natural gas facilities in Darwin or northern Australia, or processed via a floating LNG facility near the field itself.

Ramos-Horta's prediction of a July signing suggests that the core commercial terms, including the split of revenues and the processing location, may finally be settled. Previous reports indicated that the two nations were discussing a 50-50 revenue split, though neither government has confirmed the exact figures.

Market Implications

A deal would unlock investment that has been sitting on the sidelines for years. Woodside Energy, the Australian energy company that holds the largest stake in Greater Sunrise at roughly 33%, has been waiting for political certainty before committing the estimated $10-15 billion required to develop the field. Shell and ConocoPhillips hold smaller stakes.

For the broader energy market, Greater Sunrise would add meaningful supply to the Asia-Pacific LNG market at a time when demand continues to grow. Japan, South Korea, and China are all increasing their LNG imports as they transition away from coal and nuclear power. The field's proximity to existing infrastructure in Darwin gives it a logistical advantage over more remote projects.

The timing also matters politically. East Timor is seeking full membership in ASEAN, and a successful Greater Sunrise deal would demonstrate that the young nation can manage complex international negotiations and large-scale resource projects. Ramos-Horta has positioned the deal as central to East Timor's economic future and its credibility on the regional stage.

What Happens Next

If the deal is signed in July, construction could begin within 18 to 24 months, with first gas production potentially by 2030 or 2031. That timeline would still leave a five-year gap after Bayu-Undan's shutdown, a period during which East Timor will need to manage its fiscal reserves carefully and diversify its economy.

The success of Greater Sunrise will also depend on commodity prices. Natural gas prices have been volatile in recent years, spiking during the energy crisis of 2022 before retreating. A sustained period of moderate prices would support the project's economics, while a sharp decline could force renegotiation of terms.

For now, Ramos-Horta's comments represent the most concrete signal in years that the long-stalled project may finally move forward. Whether that optimism translates into a signed deal by July will depend on the final details, which have eluded negotiators for over a decade.