Trinidad and Tobago is to ask US President Donald Trump's administration to extend a license for Shell and Trinidad's National Gas Co (NGC) to develop a key gas project in Venezuela, according to sources talking with Reuters.
A US license was first granted in early 2023 as an exemption to Washington's sanctions on Venezuela.
This enabled NGC and Shell to move forward on planning and preparation for the Dragon natural gas project off Venezuela's coast, aimed at supplying gas to Trinidad from around 2027.
Washington amended the license in the same year to allow payments in hard currency or in kind to Venezuela and its state company PDVSA for gas supplies, and also extended the expiration date to October, 2025.
Shell and NGC will need an extension to begin production once they make a final investment decision (FID) on the project, which is expected this year, the sources added.
According to the two companies, Dragon's initial gas production flow should be around 200 mill cu ft per day, one of the sources said.
US sanctions targeted the whole of the Venezuelan oil and gas industry, which is controlled by PDVSA, meaning countries like Trinidad and private operators that abide by the measures require US licenses to export or pay revenue to sanctioned entities, including the government, the Central Bank and PDVSA.
This month, Trinidad's Prime Minister, Keith Rowley, said his government would soon brief Washington on the importance of keeping US licenses to develop gas projects with Venezuela for reasons of regional energy security.
According to data taken from the well, Shell and NGC have said that there is at least the 4.2 trill cu ft of gas, two of the sources told Reuters.
Trinidad needs the gas to boost its LNG and petrochemical industries, and Venezuela hopes to gain cash flow from gas exports.
If supply contract negotiations between Trinidad, Venezuela and Shell lead to prices close to the most recent gas contracts signed in Venezuela, Dragon's volumes would generate some $30 mil in monthly revenue from sales, of which 20% would go to Venezuela as royalty payments, according to calculations by consultancy Gas Energy Latin America, Reuters said.
If production starts, Dragon together with another Shell project - Manatee - which is on the Trinidad side of the border, could supply a combined 1 bill cu ft of gas per day to Trinidad and its flagship Atlantic LNG project.
