According to: Source"The Treaty on Certain Maritime Arrangements...

According to: Source

"The Treaty on Certain Maritime Arrangements in the Timor Sea, which covers Greater Sunrise, runs for 50 years from February 2007 but Australia or East Timor can terminate it in 2013 if there is still no development approval."

I think that is Feb, 2013 or almost less than a year away.

If Australia can prove the economics support FLNG over a land based option and that Timor has dragged its feet on development, they would gain a strong negotiating position.

Timor could lose the right to co-develop the field and potentially their 50% share of revenue. This is because Australia claims 80% of the field lies in its territorial waters.

There is a great article here but to quote some of the more interesting points - Source

Internationally, and particularly in Australia, there is much ambivalence towards Timor with many claiming the country’s criticisms of the FLNG concept are naive. The reality is that FLNG is here to stay and in a short space of time will no longer be seen as a novel technology

Flex LNG’s maiden FLNG unit is expected to begin producing, off Papua New Guinea, by 2014; Malaysian Petronas expect its first FLNG producer on stream in 2015; Shell’s huge Australian Prelude project is scheduled for start-up in 2017; while Inpex, working with Shell, expects its Abadi FLNG unit up and running in the Arafura Sea, not far from Sunrise, by 2018.

Rapid development and industry acceptance of FLNG has undermined the onshore TLNG argument. In 2011, Timor Leste must live with and accept the reality of FLNG as arguably the most economic means for commercialising smaller, remote offshore gasfields.

Either way, something has to give soon on this and I believe Timor will be feeling the pressure soon..

A new election there next month may helps things too but if you have a look at a simple map it gets complicated easily.