Trinidad and Tobago looks to expand scope of natural gas deal with Venezuela

Trinidad and Tobago is looking at expanding the scope of its deals with Venezuela to mitigate the effects of its dwindling supply of natural gas. This development comes at the heels of President Nicholas Maduro’s decision to grant a license to Shell Plc, which will now be responsible for developing the Dragon gas fields.

These developments will allow Trinidad and Tobago to import natural gas from the region, making use of the famed Dragon Gas Fields.

This does not come as a surprise, as Venezuela spent a good part of 2023 trying to revitalize the nation’s oil and gas deals and agreements with Caribbean and Latin American nations.

This resulted in Venezuela signing an agreement with Trinidad and Tobago in December 2023, which stipulated that the two nations would pursue a joint venture, allowing them to produce and subsequently export natural gas from the Dragon Oil Fields together.

To facilitate this, Venezuela’s state oil company PDVSA granted Trinidad’s National Gas Company (NGC) granted a 30-year lease to Trinidad and Tobago to develop the dragon fields, with Shell acting as the project’s operator. This was necessary as the fields in actuality, are with in Venezuela’s waters.

An output of 185 million cubic feet per day of natural gas is expected from the project during the first phase and which will also include the construction of a 17-kilometer pipeline from Venezuela’s Dragon field to Shell’s Hibiscus field in Trinidadian waters, where the supply will be used to produce petrochemicals and Liquified Natural Gas (LNG).

The two nations have also agreed to set a portion of the resources produced aside for the purpose of driving up exports. There were expectations that a second pipeline would be set up and would head towards Venezuela, to meet the nation’s demands. While this has not been confirmed, it remains a possibility.

In recent days, the two nations have been looking at developing more fields, which are located in mutually controlled areas of their waters. The notion was voiced by Mark Loquan, the President of Trinidad and Tobago’s national gas company.

The decline of Trinidad and Tobago’s gas reserves has forced the nation into considering such measures to secure a consistent supply for its needs. The nation has been looking for fields it can tap in its own waters and is also making use of what might be available in the waters controlled by its neighbors.

The Dragon Fields deal itself would see the two nations exporting gas by 2027 and the consistent expansion of the project could bring production figures to an astounding 350 million cubic feet per day.

Loquan asserted that the ambitions of the two nations were not limited to the Dragon Fields and that they are looking to expand further into Manekin-Cocuina and a PDVSA flaring gas capturing project.

The countries are evaluating plans to inspect wells and build a 13-mile (21 kilometers) pipeline to Shell’s Hibiscus offshore platform in Trinidad’s territory, following which, the license granted by Venezuela will be published for the public, to give the details of the project.

These developments are seen as a seismic shift in Venezuela’s ability to harness the massive oil and gas reserves that are at its disposal, which will have a profound effect on the nations economy and help it develop more influence of the region.

The opening of a significant natural gas supply in the region will also allow Venezuela to consider building important partnerships with nations, not just within the region but also beyond it.

With many nations around the world scrambling to secure a steady supply to meet their energy needs, Venezuela is now tapping into its potential to become a major player in the market in the coming years.