Ray Brindal and Rachel Pannett, Canberra – East Timor President Jose Ramos-Horta said Wednesday a decision on a site for a plant to process gas from the Greater Sunrise field will be made on commercial grounds, but whether the plant goes ahead will depend on the cost of a pipeline needed to haul the gas to East Timor.

The consortium of investors in Greater Sunrise and the East Timorese government will find the best option that makes commercial and financial sense, but "it all boils down to how much the pipeline will cost," he said in an address to the National Press Club.

If it proves too expensive to haul gas to East Timor through a pipeline for processing into liquefied natural gas, "then we have to think twice. We don't want a white elephant," he said.

The Sunrise partners – Australia's Woodside Petroleum Ltd., Royal Dutch Shell PLC (RDSB) and ConocoPhillips (COP) – want to develop the Greater Sunrise gas resource using untried floating LNG technology at the site of the resource, which straddles Australian and East Timorese waters in the Timor Sea. Woodside has said a floating LNG vessel would be A$5 billion cheaper than an onshore LNG plant in East Timor.

East Timor, which must approve the development with Australia, Tuesday said it intends to present a development plan later this year to key stakeholders in the Greater Sunrise field for a US$3.8 billion onshore LNG plant.

The consortium believes an undersea pipeline to East Timor is too costly at around US$19 billion as it has to span the Timor Trench, a massive 3,300 meters deep trough offshore East Timor's southeast coast, Ramos-Horta said.

But East Timor has had discussions with regional petroleum experts, including from Indonesia, who say such a pipeline would cost US$13 billion.

"So let's look at that. I'm not dismissing the consortium's claims, but I find it absolutely exaggerated," he said, adding that the East Timorese government is "open minded" about the location of the LNG plant and wants to discuss all options.

"I believe we can find a resolution of this in a short period of time," he said.

"At face value, without seeing any detailed financial and technical studies, of all the options I would want to see the pipeline coming to Timor-Leste because I see the benefits in job creation and (contribution) to our economy," Ramos-Horta said. "I don't support a pipeline out of patriotic duty."

"But I want to see also the cost of it, both in terms of environmental impact, as well as the financial and commercial cost," he added.

Ramos-Horta also said he would like to enlist the help of Australian Prime Minister Kevin Rudd to press East Timor's claim as it is in Australia's interest to have a stable and prosperous East Timor.

"Why not push the consortium to bring the pipeline to Timor-Leste?" because a prosperous Timor Leste will be of great benefit to Australia through its citizens having greater purchasing power, he said.