Trinidad and Tobago intends to request an extension for a U.S. license allowing Shell and the National Gas Company to develop the Dragon natural gas project in Venezuela. The extension is needed to begin production after a final investment decision expected this year, potentially yielding significant economic benefits for both countries despite existing U.S. sanctions.
Trinidad and Tobago is planning to request an extension from the Trump administration for a U.S. license related to Shell and Trinidad’s National Gas Company’s development of the Dragon natural gas project off the coast of Venezuela. This license, initially granted in early 2023, serves as an exemption from U.S. sanctions, enabling the companies to proceed with their planning for the project.
The original license was expanded to permit payments in hard currency or in-kind to Venezuela and its state-owned company, PDVSA, and its expiration was extended to October 2025. Shell and NGC require a further extension to initiate production following their anticipated final investment decision this year, with expected initial production of around 200 million cubic feet per day.
The U.S. sanctions target the Venezuelan oil and gas industry, necessitating licenses for Trinidad and others to export or pay revenues to sanctioned entities. Trinidad’s Prime Minister Keith Rowley stated his administration will soon discuss the significance of maintaining U.S. licenses with Washington, emphasizing regional energy security.
Shell has assessed the Dragon field’s viability, confirming the presence of at least 4.2 trillion cubic feet of gas as indicated by PDVSA. The company completed a seabed survey to identify drill areas, pipeline routes, and sub-sea connections. Energy Minister Stuart Young and Vice President Delcy Rodriguez of Venezuela have actively engaged in overseeing the project’s preparations.
Despite numerous licenses issued, U.S. sanctions remain stringent against President Nicolas Maduro’s administration, limiting their revenue sources amid claims that the sanctions constitute economic warfare. If favorable supply contracts are finalized, Dragon’s output could yield approximately $30 million monthly, benefiting both Trinidad and Venezuela.
The Dragon project, along with Shell’s adjacent Manatee project, is projected to provide up to 1 billion cubic feet per day of gas to Trinidad and its essential Atlantic LNG project, a significant boost to Trinidad’s natural gas and petrochemical sectors. This partnership is vital for both nations amid the ongoing tensions and economic challenges posed by existing sanctions.
In summary, Trinidad and Tobago is seeking an extension for the U.S. license that allows Shell and the National Gas Company to develop the Dragon natural gas project in Venezuela. This extension is crucial for proceeding with production and benefiting both countries economically while navigating the complexities posed by U.S. sanctions. The project holds considerable potential for boosting Trinidad’s gas supplies and enhancing regional energy security.
Original Source: www.oedigital.com
