Last month, the consortium of Shell and the National Gas Company of Trinidad signed the license to develop the Dragon gas field in Venezuela. The gas from the field is destined for export from Venezuela to Trinidad & Tobago via the Shell operated Hibiscus platform, just across the maritime border.
This historic license was negotiated between the parties after the US government waived the sanctions regime on the field, in response to intense diplomatic efforts from the Trinidad & Tobago Government, with notable support from other Caribbean nations.
The license and agreement to export gas from Venezuela marks an important new development, given the fact that Venezuela has traditionally placed much greater focus on oil production and its massive gas resources remain relatively underdeveloped.
Antero Alvarado, Managing Partner and Director at the energy consulting firm Gas Energy Latin America, in an interview with EnergyNow, said, “Despite all hindrances, finally it is going to be possible to monetise large gas reserves and to export abroad. After more than 100 years of oil operations, it’s time for natural gas.”
The development of the Dragon gas field means that gas will be produced in Venezuela waters and then exported to Trinidad via pipeline to enter T&T’s gas pipeline network and be utilised for petrochemical and LNG production.
While cross-border gas pipelines exist around the world, particularly in Europe, this is the first of its kind for T&T and Venezuela. The project has significant potential to benefit both nations. T&T needs access to natural gas, as domestic gas volumes have fallen over the last 10 years, and Venezuela has the opportunity to monetise a resource for which a market was not readily available in the past.
Alvarado said, “The relationship [between T&T and Venezuela] was guided by the idea of regional integration. Trade is the best way to improve relations between nations”. In Venezuela, the sentiment toward the project appeared also favourable. He said, “The feeling was that after so many years trying to export natural gas, common sense prevailed”.
He also indicated that the project itself was not without challenges. He said, “There is a technical challenge to connect two different nations with gas systems that are completely different. However, I’m convinced that TT players know the Gulf of Paria waters very well.” He added that good relations with CARICOM were important to ensure first gas.
When asked about next steps, Alvarado said that “Venezuela and TT need to re-engage the unitisation of cross-border fields as well as develop the fields in the Gulf of Paria and Columbus Basin”.
At the time of the announcement, the Prime Minister of Trinidad and Tobago, Dr. the Honourable Keith Rowley also stated that, “In the spirit of good neighbourliness, the Dragon can dance.” He also stated that “A door to a new commercial frontier has been opened for the benefit of all our people.”