Sources close to the preparations have said that Trinidad and Tobago intends to ask U.S. president Donald Trump’s government to extend a licence for Shell and Trinidad’s National Gas Company in order to develop a major gas project in Venezuela.
Early 2023, the U.S. license for Venezuela was granted as an exception to Washington’s sanction against Venezuela. The license allowed NGC and Shell move ahead with planning and preparations for the Dragon natural-gas project, off Venezuela’s coastline. This project is aimed at supplying LNG to Trinidad starting around 2027.
Washington extended the expiration date of the license to October 2025 and amended it in 2023 so that Venezuela and PDVSA, its state-owned company, can pay in hard currency and in kind for gas supplies.
Shell and NGC need an extension in order to start production after they have made a final decision on the project. This is expected later this year.
One source said that according to the planning of the two companies, Dragon’s initial production should be around 200 millions cubic feet per day.
U.S. sanctions are aimed at the entire Venezuelan oil industry which is controlled PDVSA. This means that countries such as Trinidad, and private operators who abide by these measures, require U.S. licensing to export, or to pay revenue to sanctioned parties including the Central Bank, PDVSA and the Venezuelan government.
Keith Rowley, the Prime Minister of Trinidad and Tobago, said this month that his government will soon brief Washington about the importance of maintaining U.S. licences to develop projects with Venezuela in order to ensure regional energy security. He didn’t elaborate on the planned discussions.
Shell and NGC had access to seismic and geotechnical data, as well as well-data, on the Dragon field and are confident that the PDVSA’s claim of 4.2 trillion cubic foot of gas is accurate, according to two sources.
Shell has also conducted a seabed study to ensure that it will not encounter any dangers. It is now determining where and how many of the wells are to be drilled as well as the route for the pipeline to reach its Trinidad facilities and the subsea connection, they said.
The two companies have worked closely with Trinidad Energy Minister Stuart Young, and Venezuela Vice President Delcy Rodriguez who visited the survey vessel separately.
NGC referred questions regarding the extension of license to Trinidad’s Government. Shell declined to make a comment. PDVSA Trinidad’s Energy Ministry and the U.S. Treasury Department didn’t immediately respond to requests for comments.
In Progress
The Dragon field is located in Venezuelan waters, near Trinidad’s maritime border. Trinidad wants the fuel for its liquefied gas and petrochemical industry, while Venezuela is hoping to get cash from gas exports.
Washington, despite granting over a dozen licenses in the past few years, has restricted Venezuelan President Nicolas Maduro’s income sources after rejecting Maduro’s claim of having won two reelections. The first U.S. energy sanctions were imposed by the United States in 2019.
Maduro, along with his allies, has criticized U.S. sanctions for being illegitimate and akin to “economic warfare” that is designed to cripple Venezuela. They have also blamed these sanctions for economic hardships and shortages. They also praised the resilience of the country despite the sanctions.
According to calculations made by Gas Energy Latin America, if supply contract negotiations lead to prices similar to those of the most recent gas agreements signed in Venezuela then Dragon’s volume would generate around $30 million per month in revenue. Of that, 20% would be paid to Venezuela as royalties.
One source said that “those numbers would hardly present a problem for United States”, referring to possible controversies regarding revenue to Venezuela.
Young, the energy minister of Trinidad and Tobago, said last year that Dragon’s production potential is much greater than its initial flow.
Young said that if produced, Dragon, along with another Shell Project called Manatee on the Trinidad side, could provide a total of 1 billion cubic feet per day of gas to Trinidad, and its flagship Atlantic Liquefied Natural Gas project.
(source: Reuters)
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Publish date : 2025-02-24 23:37:00
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