By Ahmad Pathoni
DILI, April 13 (Reuters) - The $5 billion development of the Greater Sunrise gas fields in the Timor Sea may begin soon, senior officials said on Friday, as they press for building the bulk of the project onshore East Timor.
East Timor's parliament ratified a pact with Australia in February, to evenly split royalties from Greater Sunrise, estimated to hold 8 trillion cubic feet (Tcf) of gas and up to 300 million barrels of condensate.
Investors led by operator Woodside Petroleum Ltd. (WPL.AX: Quote, Profile , Research) have been waiting for the deal to be ratified before committing to the development, whose oil and gas deposits officials say are key to the tiny country's economic independence.
But there has also been debate on whether to transport the gas to Darwin in northern Australia, process it at sea at an offshore plant, or bring it via pipeline to East Timor for export from an onshore liquefied natural gas (LNG) facility.
East Timor Prime Minister Jose Ramos-Horta, one of the leading candidates in this week's presidential election, said the government preferred a pipeline to East Timor.
"I and, of course, the Timorese government, Timorese people prefer that the pipeline comes to Timor Leste. It's a much shorter route, but there are technical difficulties, cost difficulties," he told reporters on the sidelines of an energy conference in the capital, Dili.
Ramos-Horta said he had proposed that the World Bank be a neutral entity and do an independent study on the matter with a binding recommendation.
"Whatever they recommend, we should accept it. I propose the World Bank immediately contact everybody, prepare terms of reference and we all agree with the terms of reference," he said.
Greater Sunrise was frozen in 2004 while waiting for Canberra and Dili to resolve their differences over the revenue split.
"Lack of action... jeopardises East Timor's (energy) future. LNG development takes years and the clock is ticking," Peter Cockcroft, who advises East Timor's prime minister on energy, told the conference.
"Timor Leste is geologically prone to relatively small oilfields. It is necessary to accelerate this onshore development," he said, referring to the proposed LNG project.
East Timor's energy minister, Jose Teixeira, said development of the field could start in one or two years.
Benefits from an onshore LNG project include more than $20 billion in additional wealth over the life of the project and permanent job and skill creation, Cockcroft said.
The project -- which involves Woodside, Royal Dutch/Shell (RDSa.L: Quote, Profile , Research) (RDSb.L: Quote, Profile , Research) and Japan's Osaka Gas Co. Ltd. (9532.T: Quote, NEWS , Research) -- is expected to start production in 2013 and generate about $40 billion in its lifetime.
"Our vision is to make Timor Leste energy-sufficient, which we can do, and also to become a production hub, a processing and refining hub, for this part of the world," Teixeira told Reuters on the sidelines of the conference.
A main theme of the presidential elections has been on pledges to better manage exploitation of energy reserves. Ramos-Horta looks set to hold a run-off in the poll on May 8 with the president of the ruling Fretilin party, Francisco Guterres, after no candidate got more than half the vote in Monday's polls.
Teixeira said the economic gains from bringing a gas pipeline onshore to the young, impoverished nation would be enormous.
"It's not just the gas but it's the energy you can generate for your people to provide cheaper electricity from clean fuel, it's the fertiliser plant, the methanol plant, the ammonia plant, it's all the other things you can do from this," he said.
East Timor, which gained independence in 2002 after a period of U.N. administration following separation from Indonesia in 1999, has annual per-capita gross domestic product of $400, among the lowest in the world, and a poverty rate of 50 percent.