Plans announced by Venezuela’s oil ministry to export the country's offshore natural gas to Trinidad and Tobago shouldn't have come as surprise, since both the Ministry and officials with state oil company Petróleos de Venezuela SA have hinted at the plan on numerous occasions this year. However, the surprising element related to what gas blocks the country is considering tapping to send to its neighbour.

“Venezuela is strengthening its gas industry with the exploitation of the Cardon IV field in the state of Falcon. It has a production capacity of up to one billion cubic feet of gas per day,” said Petróleos de Venezuela SA in a statement posted on its website on Sept. 22, citing company President Eulogio Del Pino. “Twenty percent can be shipped to Trinidad and Tobago and liquefied to expand the international market.”

With 198 trillion cubic feet of natural gas reserves, Venezuela holds the largest such reserve base in Latin America and the eighth-largest in the world, according to PDVSA, as the state oil company is known. Despite this abundance of resources, Venezuela continues to suffer a natural gas deficit in its industrial western region. To alleviate the deficit, the country is currently pursuing development of offshore non-associated natural gas reserves located in the projects Rafael Urdaneta, Mariscal Sucre and Deltana Platform. The former contains the Cardon IV block, which is located on the western side of Venezuela and is farthest from Trinidad and Tobago. Mariscal Sucre and Deltana Platform are located on the eastern side of Venezuela.

“Logistically, it doesn't make practical sense to send Cardon IV natural gas to Trinidad unless there was some type of swap deal involved,” said an executive with Cardon IV, speaking on a condition of anonymity since he’s not authorized to talk to the media. Media officials with Venezuela’s Oil Ministry and with PDVSA declined to comment on the announcements or confirm whether the Oil Minister had spoke erroneously.

Cardon IV production started at around 110 million cubic feet per day in July 2015. Production is expected to gradually ramp up to 150 million cubic feet per day, then reach 450 million cubic feet by year end 2015, PDVSA Gas President Anton Castillo said in July from Caracas. Future production from the project, a joint project of Spain’s Repsol SA and Italy’s Eni SpA, is expected to reach 800 million cubic feet per day by September 2017 and 1.2 billion cubic feet per day by September 2020, said Castillo. PDVSA has yet to exercise its option to back into the project, he said.

Gas from Cardon IV and other developments offshore are expected to help PDVSA reduce its demand for imported diesel, which is used to generate electricity. PDVSA plans to use initial offshore gas production to fulfill demand in the domestic market, with excess gas destined for the export markets, according to PDVSA.

Other Venezuelan Gas for Trinidad

On Sept. 22, a delegation of Venezuelan officials – including Del Pino, Foreign Minister Delcy Rodriguez and Economy and Finance Minister Rodolfo Marco Torres – traveled to Port-of-Spain to meet with new Trinidad and Tobago Prime Minister Keith Rowley. Officials from both countries discussed trade and energy, PDVSA said, as well as the development of new reservoirs in Trinidadian territorial waters, joint development of Venezuelan gas reserves with the participation of companies from Trinidad, and the construction of a 300-kilometer gas pipeline that would ship gas from Mariscal Sucre to Güiria, in the state of Sucre.

The bilateral talks also set out basic principles related to initiating development of the Loran-Manatee field that straddles the borders of Venezuela and Trinidad. “We could send our share of this gas to Trinidad,” said Del Pino.

Loran-Manatee holds just over 10 trillion cubic feet of natural gas. Venezuela and Trinidad signed a framework agreement in 2007 for the unification of deposits and signed another agreement in September 2013 that allocated 73.75 percent of the reserves to Venezuela and the remaining 26.25 percent to Trinidad.

Venezuelan officials also met with executives from Atlantic LNG, which produces liquefied natural gas from natural gas delivered from fields in Trinidad. It is unknown to what extent the officials discussed the other fields – Manakin-Cocuina and Dorado-Kapok – which also straddle the two countries’ borders.