Trinidad and Tobago plans to seek a US licence extension for the Dragon gas project, led by Shell and NGC. This project aims to supply gas to Trinidad by 2027, with initial forecasts of 200 million cubic feet per day and potential revenues of $30 million monthly for Venezuela. If granted, this extension could bolster both nations’ economies amidst US sanctions on Venezuelan assets.
Trinidad and Tobago is preparing to request a licence extension from the US government for the Dragon gas project, which involves collaboration between Shell and the National Gas Company (NGC). The original licence, granted in early 2023, permits these companies to start planning the project aimed at supplying gas to Trinidad by 2027.
The Dragon gas field is located in Venezuelan waters near the border with Trinidad. In 2023, the US amended the licence, allowing payments to Venezuela and its state-owned company PDVSA in hard currency while extending its validity until October 2025. An extension is necessary for Shell and NGC to initiate production following their final investment decision expected this year.
Initially, production from the Dragon project is projected to reach around 200 million cubic feet per day. Shell and NGC have conducted thorough analyses of seismic, geotechnical, and well data, confirming approximately 4.2 trillion cubic feet of gas in the field. Shell has also completed a seabed survey to assist in identifying key drilling sites and pipeline routes.
The NGC has deferred inquiries regarding the licence extension to Trinidad’s government, while Shell has not provided any comment on the matter. Requests for comments made to PDVSA, Trinidad’s Energy Ministry, and the US Treasury Department have gone unanswered.
Due to US sanctions on Venezuela’s oil and gas sector, Trinidad and other private operators must secure US licences to export or generate revenue for sanctioned entities including the Venezuelan government and PDVSA. Trinidad aims to utilize the gas to boost its LNG and petrochemical sectors, while Venezuela hopes for increased cash flow from gas exports.
Venezuelan President Nicolas Maduro has referred to US sanctions as illegitimate, attributing economic difficulties to these measures. If negotiations regarding gas pricing succeed, the Dragon project could potentially generate up to $30 million monthly, with 20% of revenue designated for Venezuela as royalties. Energy Minister Stuart Young indicated that the production capacity of Dragon might surpass current estimates.
Together with Shell’s Manatee project situated on Trinidad’s side of the border, these two projects could collectively supply up to a billion cubic feet of gas per day to Trinidad, particularly for its Atlantic LNG project.
Trinidad and Tobago is actively seeking an extension for the US licence necessary to advance the Dragon gas project with Shell and NGC. Key production goals, strategic analyses, and geopolitical implications underline the project’s significance in enhancing Trinidad’s gas supply and supporting Venezuela’s economic recovery. Successful negotiations and extended licensing could yield substantial revenue for both nations, positioning them favorably in the energy sector.
Original Source: www.offshore-technology.com
