Trinidad and Tobago will request a U.S. license extension for Shell and NGC to develop the Dragon natural gas project in Venezuela. Originally granted in early 2023, this license enables gas supply planning for Trinidad by 2027. Trinidad’s Prime Minister plans to emphasize the importance of these licenses for regional energy security to U.S. officials during future discussions.
Trinidad and Tobago is poised to request an extension from the U.S. government for a license that permits Shell and the National Gas Company (NGC) to advance a significant gas project in Venezuela. This license, originally granted in early 2023, allowed these two companies to initiate planning for the Dragon natural gas project off the Venezuelan coast, which aims to supply gas to Trinidad by 2027.
The U.S. has previously modified the license in 2023 to allow hard currency or in-kind payments to Venezuela and PDVSA, extending its expiration to October 2025. As Shell and NGC prepare to make a final investment decision on the project this year, they anticipate requiring an extension to commence production. Initial production is projected to reach approximately 200 million cubic feet per day.
The sanctions imposed by the U.S. target the Venezuelan oil and gas sector, managed by PDVSA, compelling countries like Trinidad and private entities to secure U.S. licenses for exporting or making payments to sanctioned entities. Prime Minister Keith Rowley has indicated that Trinidad’s government will engage U.S. officials to discuss the significance of maintaining these licenses for regional energy security.
Shell and NGC have obtained substantial data regarding the Dragon field and are optimistic about the existence of at least 4.2 trillion cubic feet of gas, per PDVSA’s earlier estimates. Shell has conducted a seabed survey to identify potential hazards and is currently assessing the drilling locations, pipeline routing, and subsea infrastructure. The companies are collaborating with Trinidad’s Energy Minister Stuart Young and Venezuela’s Vice President Delcy Rodriguez.
As negotiations for supply contracts between Trinidad, Venezuela, and Shell materialize, potential revenues from Dragon could reach approximately $30 million monthly, with 20% allocated to Venezuela as royalties. Trinidad’s Energy Minister Young has previously noted that the potential output of the Dragon project exceeds its initial projections, with the possibility of contributing significantly to Trinidad’s liquefied natural gas and petrochemical industries.
In summary, the Dragon gas project represents a vital opportunity for both Trinidad and Venezuela, allowing Trinidad to secure essential gas supplies while providing Venezuela a means to generate revenue. The successful collaboration hinges on extending the necessary U.S. licenses amidst ongoing sanctions. The outcome of these negotiations and the license extension request will be crucial for future energy stability in the region.
In conclusion, Trinidad and Tobago’s initiative to seek an extension for the U.S. license pivotal for Shell and NGC’s gas project in Venezuela underscores the strategic importance of energy collaboration in the region. The extension will facilitate the Dragon project’s development, ensuring Trinidad’s energy needs are met while enabling Venezuela to generate revenue amidst U.S. sanctions. The upcoming discussions with Washington will be critical in shaping the future of this partnership.
Original Source: money.usnews.com
