East Timor's President Jose Ramos Horta is using a state visit to Australia to try to calm escalating tensions over the development of the Greater Sunrise oil and gas field in the Timor Sea. He's still pushing for a pipeline take the gas for processing in East Timor, rather than go with Greater Sunrise Consortium's preference of a floating processing facility. Dr Ramos-Horta's speaking very diplomatically in Canberra, but he has not backed away from the option that he thinks will help move East Timor move from poverty to sustainable prosperity.

Presenter: Linda Mottram

Speakers: Jose Ramos Horta, President East Timor

Mottram: Doctor Ramos Horta is on a state visit to Australia, including a state dinner with Australia's Governor General, calls on several state governors and the opening of East Timor's new embassy in Canberra. But it'll be in talks with Australia's Prime Minister, Kevin Rudd, that some of the tensions in the relationship are most likely to be discussed. The single biggest one of those is the issue of where to process the Greater Sunrise gas which promises to be a bonanza.

Questions about the effectiveness of Australia's development assistance to East Timor has also been a running sore. And the tone of statements from East Timor on these issues has grown very loud. So how then does Doctor Ramos Horta characterise the current state of his country's relationship with Australia?

Ramos-Horta: The relationship is on very sound footing. Like any relationship, there is always some tensions particularly when it involves oil and gas. And I'm not at all worried about it. On the Australian side I presume understands some of the emotions in Timor Leste. But at the end of day all of us in Timor Leste realise that there are two very important relationship for us in this region, Australia and Indonesia. In regard to oil and gas discussions, the doors are still open, both sides. Today a press statement issued by our side, the government that has primary responsibility on this saying that talks are continuing to try to figure out what is really the best option for the development of Greater Sunrise.

Mottram: One of your ministers told Radio Australia just about a week or two ago if there wasn't a pipeline, the project wouldn't go ahead, that your side was happy to leave the gas in the ground for the next generation. Is that just an ambit claim?

Ramos-Horta: That's obviously always one option. But today the statement that came out from the Prime Minsiter's office indicate willingness on the part of the government to continue the dialogue with oil companies.

Mottram: Doctor Ramos Horta said he did have an open mind on the issue of what is, as required under the treaty governing this issue, the most economic way to develop the gas field. But he also said East Timor didn't have to take the word of the consortium of resource giants charged with bringing the gas to market that the floating LNG processing option, of FLNG, was necessarily the economic winner. He suggested independent studies to assess the issue. And he appealed to Australia to look beyond what he called narrow economic interests.

Ramos-Horta: If I were the Prime Minister of Australia and if I were the top oil executives and others sitting in Canberra I would look at the region as a whole. I wouldn't look only at my narrow economic, commercial interests. I would look at what is in the best interests of Australia. I would see look at that peace, stability, prosperity in the wider Pacific Asia region is of utmost importance to Australia.

Mottram: He said he believed the pipeline to East Timor, to spark the development of an indigenous East Timorese resource processing industry, was the answer... and he believed more economically viable that the floating option. He also dismissed claims that his tiny country lacks the skills or is too unstable for the task, pointing out that Australia imports skills and that countries like Angola, at war for 30 years, never failed to get the oil out.

Doctor Ramos Horta is clearly in Australia to smooth the waters on this issue, but also to deploy his diplomatic skill in the interests of winning this argument against one of its biggest neighbours and some equally powerful corporate interests.