Trinidad and Tobago is planning to request an extension from the U.S. for a license permitting Shell and NGC to develop a gas project in Venezuela. The Dragon natural gas project aims to supply Trinidad with gas by 2027. An extension of the license, initially granted in 2023, is essential for production to commence following investment decisions expected this year.
Trinidad and Tobago intends to request an extension from the U.S. administration for an exemption license related to Shell and the National Gas Company’s development of a crucial gas project in Venezuela. This license was initially granted in early 2023 and allows these companies to advance preparations for the Dragon natural gas project, which aims to supply gas to Trinidad from approximately 2027 onward.
The original U.S. license facilitated allowances for payments in hard currency or in kind to Venezuela’s state company PDVSA. It also set an expiration date of October 2025. An extension is essential for Shell and NGC to initiate production following their final investment decision, anticipated later this year. The initial production from the Dragon field is projected to be around 200 million cubic feet per day.
U.S. sanctions impact the Venezuelan oil and gas sectors, which are under PDVSA’s control. Consequently, nations, including Trinidad, and private entities must secure U.S. licenses for exporting or compensating sanctioned Venezuelan entities. Prime Minister Keith Rowley has recently stated his intention to inform Washington on the importance of these licenses for regional energy security, indicating forthcoming discussions.
Shell and NGC have obtained seismic and data sets regarding the Dragon field, confirming that it contains at least 4.2 trillion cubic feet of gas as asserted by PDVSA. Shell has also conducted a seabed survey to identify potential hazards and is working on determining the drilling locations, pipeline routes to Trinidad, and subsea connections. Close collaboration exists between both companies, Trinidad’s Energy Minister Stuart Young, and Venezuela’s Vice President Delcy Rodriguez, who have both visited the survey ship.
The Dragon field is located in Venezuelan waters adjacent to Trinidad’s maritime border. Trinidad needs this gas to enhance its liquefied natural gas and petrochemical industries. Additionally, Venezuela aims to benefit economically from gas export revenues amidst ongoing U.S. sanctions that have targeted President Nicolas Maduro’s administration since 2019. The sanctions are viewed by Maduro and his supporters as detrimental, contributing to significant economic difficulties.
Negotiations regarding gas supply contracts could yield prices comparable to recent agreements made in Venezuela, which, if finalized, may generate approximately $30 million monthly in revenue, with 20% allocated as royalties to Venezuela. Sources indicate that such revenues may not pose substantial concerns for the United States. Trinidad’s Energy Minister Young has remarked that the Dragon project’s potential output far exceeds initial projections, and together with Shell’s Manatee project, it could supply up to 1 billion cubic feet of gas per day, further fortifying Trinidad’s energy portfolio.
In summary, Trinidad and Tobago is seeking a license extension from the U.S. for Shell and the National Gas Company’s key gas project in Venezuela, which stands to enhance regional energy security and economic stability. The Dragon project holds substantial potential for gas supply, and discussions regarding its future are critical amidst U.S. sanctions aimed at Venezuela’s oil and gas industry.
Original Source: money.usnews.com
