Trinidad, Venezuela sign new gas deal, Shell in wings

Trinidad and Tobago moved a step closer to accessing Venezuelan natural gas through a Shell-operated offshore platform in Trinidadian waters under a new bilateral agreement signed in Caracas today.

Details of the agreement remain sketchy, and Shell had no immediate comment.

The agreement signed by Venezuela´s president Nicolas Maduro and Trinidad´s prime minister Keith Rowley is aimed at alleviating a widening gas supply deficit in Trinidad by facilitating the transport of gas from Venezuela´s Dragon field to the existing Shell platform.

The gas would enable Trinidad to replenish gas supply to domestic petrochemical industries and the Atlantic liquefaction complex which have been subject to supply curtailments of up to 30pc for some three years. Shell is a shareholder in all four trains of the 14.8mn t/yr Atlantic LNG facility.

Rowley said before departing for Caracas that the agreement could open the door for "partnering" Trinidad with Shell as the "owner of the gas pipeline and platform infrastructure in Trinidad which can be considered for utilization in the entry of or receipt of any gas from Venezuela."

He said details of the agreement signed in Caracas would be disclosed very soon.

The gas shortage plaguing Trinidad "in the not-too-distant future, will be dealt with by a sustained and sufficient supply coming from the Venezuelan fields which will be processed here and supply us with an export product into our current and other markets," Rowley said. "The whole intention is that our operations here in Trinidad and Tobago can have a much longer future."

Today's agreement builds on an initial memorandum of understanding that Trinidad and Venezuela signed earlier this year under which Trinidad would purchase gas from Venezuela's offshore Dragon field, located in waters slightly north of the Paria peninsula.

The Dragon field, which PdV has been struggling by itself to develop since at least 2011, is part of the planned 1.2bn ft3/d Mariscal Sucre offshore gas production project which Russian state-owned Rosneft is slated to join.

The Venezuelan government said two additional agreements were signed today. One to initiate negotiations with Shell Venezuela to "evaluate opportunities to reduce gas flaring in the northern part of Monagas state; and a second to obtain financing for the PdV-Shell Petroregional del Lago oil joint venture. The venture produces under 30,000 b/d of medium crude from Lake Maracaibo's Urdaneta West field.

"A fourth agreement will be signed and announced when its translation into Spanish is complete," Maduro said. No details of this fourth agreement were released.

Spain´s Repsol and Italy´s Eni hold 100pc of the Cardon 4 joint venture covering the Perla field, Venezuela´s first offshore commercial gas project located in the Gulf of Venezuela. The field is currently producing around 540mn ft3/d of gas which is purchased by PdV mainly for its refining operations.