Shell Australia has reached a $300m agreement to divest its 26.56% interest in the Greater Sunrise natural gas fields located off the northern coast of the country to East Timor.

The agreement marks the company’s exit from the project whose development plans hit a roadblock due to maritime border disputes between Australia and East Timor. The project site bestrides the maritime border between the two countries.

East Timor Government intends to push for the development of the project.

Shell Australia executive vice-president Zoe Yujnovich said: “We respect the Timor-Leste government’s determination to develop the Sunrise fields through an onshore LNG facility on its south coast.

“Although we formed different views about the optimal development scenario, we understand the priorities of the Timor-Leste Government and wish it well in pursuing its aspirations to develop this important resource for the nation.

“This sale aligns with our global strategy to reshape Shell into a simpler and more resilient company.”

“This sale aligns with our global strategy to reshape Shell into a simpler and more resilient company.”

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As part of the deal, the government will acquire Shell’s permits NT/RL2 and NT/RL4 within Australian waters, and PSC 03-19 and PSC 03-20 within East Timor waters, as well as associated governance agreements.

The Greater Sunrise comprises the Sunrise and Troubadour gas and condensate fields, which are located 150km south-east of East Timor and 450km north-west of Darwin, Northern Territory, Australia.

Around 79.9% of the Greater Sunrise fields are situated in Australian waters, while the remaining 20.1% is situated in an area jointly administered by East Timor and Australia.

The countries are currently working on a conciliation process to resolve the border disputes.

The completion of the transaction is subject to the government securing funding approval from the Timor-Leste Council of Ministers and National Parliament, as well as regulatory approvals and partner pre-emption rights.

Last month, ConocoPhillips signed an agreement to sell its 30% stake in the Greater Sunrise fields to the East Timor Government for $350m.

Other stakeholders in the project include Osaka Gas and Woodside, which is the operator with a 33.4% interest.