Trinidad and Tobago plans to seek an extension for a U.S. license allowing Shell and NGC to develop the Dragon gas project in Venezuela, vital for Trinidad’s energy supply. A final investment decision is expected this year, aiming for initial production of 200 million cubic feet per day by 2027. Trinidad’s Prime Minister emphasizes the significance of maintaining U.S. licensing for regional energy security.
Trinidad and Tobago intends to request an extension from the U.S. administration to prolong the license for Shell and the National Gas Company (NGC) to develop the Dragon natural gas project off Venezuela’s coast. This project aims to facilitate gas supply to Trinidad, expected to commence around 2027, relying on a U.S. license originally granted in early 2023 as a sanction exemption for planning and preparatory work.
The U.S. amended the license later that year, allowing transactions in hard currency or goods with Venezuela’s state oil company, PDVSA, and extending its validity to October 2025. Shell and NGC are anticipating a final investment decision for the project within this year, which would necessitate an extension to begin gas production as planned.
The anticipated initial production from the Dragon field is approximately 200 million cubic feet per day. The project has considerable implications, as U.S. sanctions restrict operations within Venezuela’s petroleum industry, necessitating licenses for Trinidad and other countries to conduct transactions involving PDVSA or other sanctioned entities.
Trinidad’s Prime Minister Keith Rowley emphasized the urgency to communicate Washington about the strategic need for U.S. licenses to develop these gas projects with Venezuela. This is crucial for regional energy security, though specifics regarding the upcoming discussions have not been disclosed.
Trinidad and Shell have gathered extensive data on the Dragon gas field, confirming the presence of at least 4.2 trillion cubic feet of recoverable gas, while conducting a seabed survey to finalize drilling sites and pipeline routes. Both companies are collaborating with Trinidadian and Venezuelan officials to advance the project.
The Dragon field lies near Trinidad’s maritime border, crucially affecting Trinidad’s energy sector, particularly its liquefied natural gas and petrochemical industries. Conversely, Venezuela aims to capitalize on gas exports as a revenue stream amid ongoing U.S. sanctions and economic challenges under President Nicolás Maduro’s regime.
Though Maduro’s government has criticized U.S. sanctions as harmful economic warfare, they also highlight the resilience demonstrated by the Venezuelan economy. If Trinidad, Venezuela, and Shell reach favorable contract negotiations, potential revenues from Dragon could generate up to $30 million per month, benefitting both parties significantly.
In addition to Dragon, another Shell initiative, Manatee, could combine with Dragon to deliver up to a billion cubic feet of gas daily to Trinidad, supporting the flagship Atlantic LNG project and further securing Trinidad’s energy future.
Trinidad and Tobago’s pursuit of an extension for the U.S. license vitalizes the gas project in Venezuela, essential for both nations’ energy sectors. The combination of the Dragon and Manatee projects could greatly enhance Trinidad’s gas supply, while strategic negotiations with the U.S. are crucial for ongoing developments. The potential revenues from gas exports may also impact Venezuela’s economy positively amid persistent sanctions.
Original Source: money.usnews.com
