Portugal Colonial - East Timor says China could help fund major pipeline project

Speaking to reporters after a meeting with Australian Prime Minister Anthony Albanese in Canberra, the president and Nobel peace laureate said "of course, China" could be involved in the Greater Sunrise project, which aims to tap trillions of cubic feet of natural gas.

The project, located in waters between East Timor and Australia, has long been touted as a joint venture between the two countries.

But exploration has been stalled for years due to disputes over maritime boundaries and whether the gas should be refined in Australia or East Timor.

Ramos Horta is pushing hard to gain foreign financing and to have LNG facilities built in his country, seeing it as a potential economic game-changer.

He told reporters that a number of Asia-Pacific countries could be involved in the project -- including Japan and South Korea -- but also mooted Beijing's involvement, aware it was likely to raise hackles in Canberra.

"Of course China (could be involved). It's a pipeline, we are not talking about maritime security. It's just a pipeline. China would just be an investor," he said.

But policymakers in Canberra are likely to baulk at Chinese involvement in critical infrastructure so close to Australia's borders.

Australia is already concerned about China's rapidly expanding regional influence, including in East Timor, which gained independence in 2002 and sits just a few hundred kilometres (miles) off Australia's northern coast.

China built the country's parliament, Ramos-Horta's presidential palace and the foreign ministry.

Revenues from existing fossil fuel projects are soon expected to run dry, and the country's sovereign wealth fund is rapidly dwindling, leading some to warn of an impending "fiscal cliff."

Australia's top diplomat, Penny Wong, recently warned Dili that it faces some "pretty serious economic challenges" and warned against the risks of so-called "debt trap" diplomacy, a term widely used in reference to Chinese investment strategy in countries like Sri Lanka.

"Our debt, our loans, they are in the spirit of wanting East Timor to be more resilient", she said on a visit to the island nation's capital.

"We know that economic resilience can be affected, can be constrained, by unsustainable debt burdens or by lenders who have different objectives."

A.Silveira--PC