Venezuela, Trinidad Ink Gas Deal
Officials from Venezuela and Trinidad and Tobago signed a joint agreement August 25 for construction of a pipeline that will connect the Dragon offshore natural gas field with the Hibiscus offshore field.
The agreement contemplates construction, operation and maintenance of a 16-inch diametre sub-sea pipeline that will span 15 km from the Dragon gas field located offshore Sucre state in Venezuela to the Hisbiscus natural gas field and platform offshore Trinidad and Tobago, Venezuela’s state-owned oil company PDVSA said in a statement.
“The estimated cost of the pipeline is $300mn,” Antero Alvarado, managing partner for consultant Gas Energy Latin America told NGW from Caracas. Anglo-Dutch major Shell is expected to cover the costs and first gas is slated to flow in 2020-2021. While pricing details were kept confidential, the deal is beneficial to both Venezuela and Trinidad and Tobago, Alvarado said.
Gas from the 3.1 trillion ft3 Dragon field will reach Trinidad and Tobago via Point Fortin and supply the twin-island country’s Atlantic LNG plant as well as other industries in the internal market, PDVSA said.
Trinidad’s media outlet The Guardian reported that volumes to be shipped to Trinidad and Tobago would reach 150mn ft3/day with an option to rise to 300mn ft3/day.
The Dragon field is one of four fields, along with Patao, Mejillones and Río Caribe, that comprise the Mariscal Sucre offshore project, which is located nearly 40 km north of Venezuela’s Paria peninsula in Sucre state.
Venezuela has been planning development of Mariscal Sucre under a two-phase development scheme for several years. Phase one production from the Dragon-Patao fields is projected to reach 600mn ft3/day, while phase two production from the Mejillones-Rio Caribe fields is projected to reach 650mn ft3/day, according to project details provided by PDVSA more than five years ago.
While Venezuela’s National Assembly has said in the past that deals signed by third parties with Venezuelan president Nicolas Maduro and his government, which it has said did not fairly win the most recent presidential elections, are illegal without the institution’s authorisation, the “gas deals fall under different laws, and thus don’t need approval of the National Assembly,” said Alvarado.
The joint agreement signed in Caracas by Maduro and Trinidad and Tobago’s prime minister Keith Rowley was originally to be signed August 22 in Trinidad’s capital Port of Spain, but the date and venue were changed due to a 7.3 magnitude earthquake in eastern Venezuela a day earlier that caused varying degrees of damage to infrastructure across the island.
Trinidad and Tobago has struggled for the last decade or so to boost its domestic natural gas supply to meet contracted demand. The Venezuelan gas deal, some 12 years in the making, along with other recent gas deals, will assist the small Caribbean country to boost declining gas production and allow it to supply electric, ammonia and methanol industries lacking gas.