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Venezuela gas price beats home rate: Trinidad PM

  • : Fertilizers, Natural gas, Petrochemicals
  • 18/08/27

The price that Trinidad and Tobago agreed to pay for Venezuelan natural gas is "extremely competitive" and lower in some cases than what state-owned NGC pays domestic producers, Trinidad's prime minister Keith Rowley said yesterday.

Rowley spoke a day after his government signed a long-awaited agreement with Venezuela to purchase 150mn cf/d of gas from Venezuelan state-owned PdV's offshore Dragon field.

Describing the deal as a "government-to government-arrangement," Trinidad's energy minister Franklin Khan said yesterday that the price is confidential. One part of the agreement sets out the commercial terms, while the other commits both governments to implement and complete the project, he said.

Neither government nor company officials have specified the gas price. A June 2018 attempt to sign the deal failed because PdV and NGC could not agree on the price. An executive in PdV's onshore Gas Anaco division told Argus that PdV had been seeking $5/mn Btu, while NGC was pressing for $2.50-$3.00/mn Btu, around the US Henry Hub benchmark. The executive, who is privately critical of the new agreement, said it is bad deal for Venezuela, because it deprives domestic industries such as steelmaking, petrochemicals and power generation of much-needed supply.

The key parties to the agreement are PdV, NGC and Shell whose facilities in Trinidad will receive the gas and tie it into the national distribution network managed by NGC.

Shell and NGC will construct a $150mn flowline of 17km that will deliver the gas across the maritime border to Shell's existing Hibiscus platform off northwestern Trinidad starting in 2020. Volumes are eventually slated to double to 300mn cf/d.

Shell did not reply to a request for comment.

According to Trinidad's energy ministry, the agreement was signed in Caracas by Rowley, Venezuelan president Nicolas Maduro, NGC chief executive Mark Loquan and Shell's vice president for commercial operations in South America and Africa Mounir Bouaziz.

For Trinidad, the Venezuelan gas is fundamental to ending nearly five years of supply curtailments to key gas-based industries, including Atlantic LNG in which Shell is a leading shareholder, along with BP. Both majors are Trinidad's top gas producers. The terms of their domestic gas supply agreements with NGC are not public.

Other gas-based industries affected by Trinidad's gas shortage are methanol and ammonia.

Trinidad's gas production has been falling since 2012, when it averaged 4.1 Bcf/d. Output began to rebound in November 2017 on the back of two BP-led projects that are delivering a combined 790mn cf/d. National gas production averaged 3.68 Bcf/d in January-June, up by 12.5pc year on year, according to energy ministry data.

For Venezuela which is in the throes of a severe economic crisis, the gas supply agreement will bring in desperately needed hard currency. Politically, the deal with Trinidad helps Maduro to counter international efforts to isolate his autocratic government. Venezuela's opposition and detractors inside PdV say the Trinidad agreement will be revoked after Maduro is swept from power, because it was struck without the approval of the opposition-controlled national assembly, which Maduro replaced with a rubber-stamp constituent assembly in 2017.

Trinidad's political opposition group UNC is also critical, contrasting the "glitz and glamour" of Rowley's trip to Venezuela with what it says are sparse details about the agreement. "This deal has immense local and international ramifications, and we are putting a great deal of experience and expertise behind it, so we must be given the details to ensure that this good deal for Trinidad and Tobago."

Dragon forms part of Venezuela's 14.7 trillion cf Mariscal Sucre complex, which also encompasses the Patao, Mejillones and Rio Caribe fields.

The pricing and template of the Dragon agreement will allow Trinidad and Venezuela to restart negotiations on sharing cross-border gas, Khan said.

Venezuela and Trinidad have been trying for eight years to reach an agreement to tap 10 Tcf of gas in the Chevron-operated Loran-Manatee field – the biggest of three cross-border deposits.

In his remarks yesterday, Rowley said the Dragon agreement will not be affected by US financial sanctions on PdV. The US will remain Trinidad's trading partner, just like Venezuela, and "Trinidad is a sovereign country and we make decisions based on the best interest of our people," he said.


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25/02/15

Peru backs Saudi critical minerals hub plan

Peru backs Saudi critical minerals hub plan

Munich, 15 February (Argus) — Peru's foreign minister Elmer Schialer today said he supports US policy backing Saudi Arabia's efforts to become a global critical minerals powerhouse, a strategy that aims to counterbalance China's dominance and bring down costs. Speaking at the Munich Security Conference, Schialer called the US approach "a good strategy". Schialer was responding to a question on whether the US' backing of Saudi Arabia's efforts to become a critical minerals refining and processing hub was a good idea. "I think we ought to give it a try, because when we have two, three or four main centers of refinement and the finalizing the product, the cost will also eventually go down, which is also very important, economically speaking," Schialer said. Led by the US, western countries are keen to loosen China's stranglehold on access to critical minerals. China controls about 90pc of the world's capacity for processing the minerals and has steadily tightened restrictions on exporting the materials and technology needed to process them. Beijing imposed new restrictions on exports to the US in late January in response to President Donald Trump's tariffs on imports to the US from China. Saudi Arabia in recent years has made strides in positioning itself on the global critical minerals map. As part of its economic diversification plan Vision 2030, the kingdom aims to strengthen local processing and industrial value added, while building supply chains that are more resilient to global disruptions. Saudi Arabia also has reiterated its commitment to developing its substantial reserves of copper, gold, rare earths, potash, and bauxite, while also expanding domestic electric vehicle manufacturing. Riyadh in January unveiled plans to develop a new mineral investment project valued at $100bn, $20bn of which was already in the final engineering phase or under construction. The kingdom's Ministry of Industry and Mineral Resources increased its estimate of the value of its unexploited mineral resources from $1.3 trillion to $2.5 trillion in early 2024, boosted by new discoveries. State-controlled Aramco has also created a joint venture with Saudi state mining company Ma'aden to explore and produce energy transition minerals. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EU may trigger clause to boost defense spending


25/02/15
25/02/15

EU may trigger clause to boost defense spending

Munich, 15 February (Argus) — European Commission president Ursula von der Leyen wants to trigger an emergency clause that would allow member EU countries to significantly increase their spending on defense. She also warned that "unjust" tariffs on the EU will not go unanswered. Speaking at the Munich Security Conference on Friday, Von der Leyen said she "will propose to activate the escape clause for defense investments". Such a move would "allow member states to substantially increase their defense expenditure", she said. Von der Leyen's proposal would exempt defense from EU limits on government spending. Highly indebted EU members such as Italy and Greece have voiced support for the move, arguing that activating the escape clause would enable them to increase defense spending while avoiding other budget cuts. Fiscally conservative EU countries, including Germany, could push back against the idea. Von der Leyen's proposal comes at a sensitive time for the EU, with US president Donald Trump pressuring Europe to finance more of its own defense. Trump wants EU members of Nato to more than double military expenditure to protect themselves from potential aggression rather than leaning on Washington's support. Trump is also pushing to end the conflict between Russia and Ukraine. "Let there be no room for any doubt. I believe when it comes to European security, Europe has to do more. Europe must bring more to the table," Von der Leyen said, adding that the EU needs to increase its military spending from just below 2pc of GDP to above 3pc. The increase "will mean hundreds of billions of euros of more investment every year", she said. Tariffs will be answered Von der Leyen also reemphasized the EU's position on the recent US tariff decision, noting that tariffs act like a tax and drive inflation. "But as I've already made clear, unjustified tariffs on the European Union will not go unanswered," she said. "And let me speak plainly, we are one of the world's largest markets. We will use our tools to safeguard our economic security and interests, and we will protect our workers, our businesses and consumers at every turn," she added. Trump on 11 February imposed a 25pc tariff on all US imports of steel and aluminum effective on 12 March, although he said he would consider making an exemption for imports from Australia. US 25pc tariffs on steel and aluminum imports could result in a 3.7mn t/yr decrease in European steel exports, as the US is the second-largest export market for the bloc, European steel association Eurofer said. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Lack of tariff details worry US energy markets


25/02/14
25/02/14

Lack of tariff details worry US energy markets

Washington, 14 February (Argus) — Uncertainty over potential tariffs on US imports from Canada and Mexico is already roiling North American energy trade, as trading desks struggle to understand how tariffs would be assessed and some buyers are unwilling to commit to taking March cargoes without more details. US president Donald Trump's planned 10pc tariff on energy commodity imports from Canada and a 25pc import tax on Mexican energy was originally set for 4 February but he postponed implementation until 4 March. The three governments are negotiating to avert a full-blown trade war, and many market participants are hoping that Trump would again delay their implementation after winning some concessions, as he did earlier this month. But even without tariffs in place, vast segments of the energy industry — oil and gas producers, refiners, pipeline operators, traders — are bracing for them. Energy trade across North America has been tariff-free for decades. Trump during his first term terminated the 1994 North America Free Trade Agreement, but replaced it with the US-Mexico-Canada trade agreement in 2020 that kept the energy trade terms unchanged. The sudden imposition of tariffs after decades of free trade could create legal uncertainty in contractual obligations related to the payment of tariffs and reporting requirements, law firm Vinson & Elkins partner Jason Fleischer told Argus . "It's been a long time since oil and gas pipelines have really had to deal with anything quite like this." At least one large Canadian refiner attempted to pass along the tariff to gasoline cargo buyers in the US ahead of the original 4 February start date, leading a few buyers to threaten to pull out of their contracts, market sources told Argus . Complicating the matter is the approach taken by the Trump administration to impose import taxes differs greatly from current trade terms. The regular US customs duties on crude, for example, are currently set in volumetric terms, at 5.25¢/bl and 10.5¢/bl depending on crude quality. In practice, nearly every source of US crude imports is exempt from tariffs at present. But the import tax set out in Trump's executive orders is to be imposed on the value of the commodity — without specifying how that will be calculated and at what specific point during the transportation process. Likewise, guidance on the new tariffs from the US Customs and Border Patrol (CBP), given just before the original 4 February deadline, did not address the specific issues relating to the energy commodities. CBP and the Treasury Department will have to issue regulations spelling out specific details on how tariffs are to be assessed and collected, Vinson & Elkins partner Jeff Jakubiak said. "The advice we're giving to companies is to collect information and get ready to provide it to the government at some point in the future," Jakubiak said. If tariffs go into effect, "there is likely to be a combination of reporting obligations by the transporter as well as the owner of the commodity. And in both cases, my advice is, figure out how you can accurately count and assign volumes that are moving across the border and figure out how you would price those." Market effects also uncertain The uncertainty over the timing and details of implementation of tariffs have left the affected market participants having to guess who will carry the burden of new taxes. The discount for Western Canadian Select (WCS) crude at Hardisty, Alberta, to the CMA Nymex WTI contract widened on the eve of the initial 4 February deadline of tariffs, suggesting that market participants expected Canadian producers to bear the brunt of tariffs. But over time, that burden likely will shift depending on individual market power of buyers and sellers. This could hit refiners in the US midcontinent that currently rely on WCS and have few alternatives to taking Canadian crude. They could, in turn, pass on the additional costs to consumers at the pump. US independent refiner PBF Energy said this week that tariffs would likely cut US midcon refinery runs , even if those refiners could find alternatives to Canadian crudes. Most Mexico-sourced crude markets are seaborne, giving producers in that country an alternative to US markets. "For this scenario, we anticipate [US Gulf coast] refiners will reduce consumption to the lower limit of their contractual obligations but will continue to purchase Mexican crude and pay the tariff via reduced refining margins," investment bank Macquarie said in a recent note to clients. Canadian producers also expressed concern about the uncertain impact of tariffs on crude volumes trans-shipped through the US, either for exports to third country destinations from Gulf coast ports or transported on US pipelines to destinations in eastern Canada. Without guidance from the US customs authorities, it is not clear if such flows would be subject to new US tariffs. Integrated oil sands producer Suncor's refineries on the Canadian east coast rely on crude flows from Enbridge's 540,000 b/d Line 5 or 500,000 b/d Line 78 that cross into the US in Michigan before crossing back into Canada. "I would say that I don't know that anyone on the planet knows exactly what's going to happen on tariffs," chief executive Rich Kruger said. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico’s Sierra Madre pipeline faces permit hurdles


25/02/14
25/02/14

Mexico’s Sierra Madre pipeline faces permit hurdles

Mexico City, 14 February (Argus) — Gas supply to Mexico's largest LNG terminal is in question as security concerns and community opposition threaten the Sierra Madre pipeline's progress. Mexico Pacific's 48-inch, 800km (497 mi) pipeline, when completed, will transport up to 2.8 Bcf/d of natural gas from Texas' Waha Basin to Mexico Pacific's Saguaro LNG terminal in Puerto Libertad, Sonora state. The terminal, under construction, is expected to reach 30mn tonnes (t)/yr capacity over two phases — nearly half the combined output of Mexico's six Pacific LNG projects. Mexico Pacific says the first three 5mn t/yr trains will be completed in 2025, with all federal, state and municipal permits secured. But the pipeline still lacks key state and municipal approvals. "The terminal has all its permits," said Miriam Grunstein, a former advisor to the energy regulatory commission CRE. "But some pipeline permits will be tough to secure." Both the terminal and pipeline have strong federal and state backing. In October, Mexico's president Claudia Sheinbaum publicly praised Mexico Pacific's planned $15bn investment. The company also signed agreements with Chihuahua and Sonora state governments and national power utility CFE to channel investments into social, security and infrastructure projects. "The pipeline is likely to get state permits," Grunstein said, "but political opposition is real." While Sheinbaum's Morena Party dominates congress, Chihuahua governor Maria Eugenia Campos belongs to the opposition party PAN, and the centrist PRI still holds sway in northern states. "The PAN and PRI could try to block the project to weaken Morena," Grunstein said. Security is another major hurdle. "Border projects need military protection," said Eduardo Prud'homme, former technical director at Mexico's state pipeline operator Cenagas, citing threats from criminal organizations trafficking drugs and migrants. The pipeline's route runs near the Altar desert, a federally protected area used by human traffickers. Clashes with drug gangs and armed human traffickers could escalate after Sheinbaum pledged to deploy thousands of National Guard troops to the border in talks with US president Donald Trump, Grunstein said. The last time Mexico waged direct war on cartels — during the 2006-2012 administration of former president Felipe Calderon — it resulted in over 120,000 homicides and 27,000 disappearances in six years, according to government data. Durazo's 'Plan Sonora' Sonora governor Alfonso Durazo has privately committed to securing the Sierra Madre project, Grunstein said, while Chihuahua's Campos "has been silent on the issue." "For Durazo, the stakes are high," she said. "It's part of ‘Plan Sonora,' his administration's flagship project, and he'll push to start construction this year." Launched in 2022, Plan Sonora aims to establish a cross-border lithium battery supply chain, with a state-owned company managing lithium extraction. A new 1GW CFE solar plant will support the industry, but natural gas from Sierra Madre remains key in the transition. Environmental opposition could further complicate matters. Over 30 civil groups have protested the LNG project's impact on the Gulf of California's biodiversity, organizing rallies and gathering 200,000 signatures. Their formal complaints date back to former president Andres Manuel López Obrador's administration, but Sheinbaum— an environmental scientist — has yet to address them. Indigenous resistance may pose the biggest challenge. Mexico Pacific is likely just beginning the legally required consultation process. "Mexico has struggled to secure indigenous approvals for pipelines," Grunstein said. "The Tula-Tuxpan pipeline was delayed over six years because of opposition. This could trigger even greater resistance." By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Central eastern Europe’s gas flows switch west to east


25/02/14
25/02/14

Central eastern Europe’s gas flows switch west to east

London, 14 February (Argus) — Strong import demand in Ukraine and Moldova has shifted regional pricing dynamics and driven a switch to west-to-east gas flows in central and eastern Europe. Outflows from Slovakia, Poland and Hungary to Ukraine surged to a combined high of 267GWh on 13 February, after Ukraine's Naftogaz started issuing tenders for additional gas on a day-ahead basis on top of previous balance-of-month bookings. Combined outflows at these points were only 30 GWh/d on 1-5 February, but they stepped up significantly afterwards as the weather turned much colder and continued attacks on Ukrainian gas production infrastructure significantly reduced domestic output ( see flows graph ). And capacity bookings suggest flows will remain strong. Firms have booked 78 GWh/d at Budince on the Slovak border and 54.1 GWh/d at Bereg on the Hungarian border for the rest of February and may continue to top this up with day-ahead or within-day reservations. After including receipts from Isaccea in Romania and some transit through Moldova, Ukrainian inflows reached as high as 274GWh on 13 February. But at least some of this gas exited Ukraine again to end up in Moldova, particularly when EU-funded imports to the Transnistrian region ended and Moldovagaz took over supply obligations on 11-13 February. Trading firm Met will supply gas to Moldova from today onwards, probably through Bereg on the Ukrainian border rather than the previously-used route through Isaccea. After taking into account all of these border flows, Ukrainian net imports reached 229GWh on 13 February, by far the highest this month. With Ukrainian gas storage withdrawals at nearly full capacity , any additional upward flexibility needed in the system will have to come from higher imports. Higher Ukrainian and Moldovan import demand has not just flipped flows at these countries' borders, but has also drawn in gas from further west. Physical gas flows at Baumgarten on the Slovak-Austrian border flipped towards Slovakia on 12-13 February for the first time since one day in December last year, and before that in December 2020. The end of Russian gas transit through Ukraine, which moved Russian gas across Slovakia to Austria, made the switch more feasible but was still a reversal of average net outflows to Austria of 12 GWh/d on 1-11 February. And flows from Austria to Hungary at Mosonmagyarovar have stepped up significantly since 7 February, averaging 56 GWh/d on 7-13 February against nearly zero earlier in the month. Mosonmagyarovar was little used since the start of last year, having previously carried Russian gas transited through Ukraine to Hungary, as well as spot purchases when economical. And while Oberkappel on the German border had already been flowing towards Austria since the start of this month, net inflows jumped to 109 GWh/d on 7-13 February from 52 GWh/d earlier this month. Significant changes to regional gas price differentials have incentivised this reorientation of flows in central and eastern Europe. The Hungarian and Slovak day-ahead markets each have held a consistent premium to Austria since 6 February, having been at a small discount earlier this month and at larger €1.92/MWh and €0.93/MWh discounts, respectively, in January. Naftogaz has bought the majority of its gas from Slovakia and Hungary, driving up prompt prices to a premium to other neighbouring markets. The Slovak day-ahead market's premium to Austria peaked at €1.40/MWh on 13 February, while Hungary's premium reached €2.64/MWh on 11 February ( see price graph ). By Brendan A'Hearn Ukrainian flows in February GWh HU, SK day-ahead prices vs AT €/MWh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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