Trinidad and Tobago aims to secure an extension for a U.S. license allowing Shell and NGC to develop the Dragon gas project in Venezuela, crucial for future gas supplies to Trinidad. With an initial production flow targeted at 200 million cubic feet per day, this project could elevate regional energy security and potentially generate significant revenue for both nations amid existing U.S. sanctions.
Trinidad and Tobago is preparing to request an extension of a U.S. license from the administration of President Donald Trump for Shell and the National Gas Company (NGC) to develop a natural gas project in Venezuela. Sources indicate that the original license was issued in early 2023 as an exemption to existing sanctions, allowing the companies to proceed with planning for the Dragon gas project, which aims to provide gas to Trinidad from approximately 2027.
The U.S. amended the license in 2023 to permit payments to Venezuela and state-owned PDVSA in both hard currency and in kind. This extension is vital for Shell and NGC as they plan to finalize investment decisions and initiate production, which they anticipate will start following their upcoming decision this year.
The projected initial production flow from the Dragon project is expected to reach around 200 million cubic feet per day. Current U.S. sanctions cover the entire Venezuelan oil and gas sector, necessitating exporters like Trinidad to obtain U.S. licenses in order to engage with entities under sanctions, including the Venezuelan government and PDVSA.
Trinidad’s Prime Minister Keith Rowley has expressed intentions to inform U.S. officials about the importance of maintaining licenses for energy security, although specific details of the discussions remain undisclosed. Shell and NGC have access to extensive data on the Dragon field and have verified significant gas reserves as indicated by PDVSA.
Shell also completed a seabed survey to mitigate potential drilling hazards while exploring optimal drilling locations and pipeline routes to Trinidad facilities. Collaboration between NGC, Shell, Trinidad’s Energy Minister Stuart Young, and Venezuelan officials has been ongoing, with both ministers taking a direct interest in the survey efforts.
The Dragon field is strategically located near Trinidad’s maritime border, with Trinidad requiring this fuel to enhance its liquefied natural gas and petrochemical sectors while Venezuela seeks additional cash flow through gas exports. Despite multiple licenses issued in previous years, U.S. sanctions continue to restrict revenues for the Maduro regime, which they characterize as unjust economic warfare.
Trinidadian officials estimate that successful negotiations could yield revenues of approximately $30 million monthly, with 20% allocated as royalties to Venezuela. Given this context, one source remarked that such figures would not pose significant concerns for the U.S. administration. Trinidad’s Energy Minister has previously suggested that the project’s output potential exceeds initial estimates, with the combined output from Dragon and another Shell initiative, Manatee, possibly supplying up to 1 billion cubic feet of gas daily to Trinidad’s Atlantic LNG project.
Trinidad and Tobago’s planned request for a U.S. license extension reflects the strategic importance of the Dragon natural gas project in Venezuela. The project promises substantial economic benefits for both countries while navigating complex U.S. sanctions. Successful negotiations could significantly enhance Trinidad’s energy sector, while also providing Venezuela with much-needed revenue amid ongoing sanctions. As international relations evolve, this partnership emphasizes the critical role of energy security in the region.
Original Source: money.usnews.com
