Minister of Energy Stuart Young said the “historic signing” took place in Caracas. The field holds around 4 trillion cubic feet of gas.
Young said his country would work with Venezuela “to advance the development and production of Venezuelan natural gas for export and utilisation in Trinidad and Tobago. We have reached a significant agreement and milestone.”
Venezuelan President Nicolas Maduro oversaw the signing ceremony. The president described the deal as a “gigantic step”.
The agreement will see the Venezuelan gas field produced via infrastructure in Trinidad & Tobago. The agreement is “a message of peace, of complementarity, solidarity, exercised and shared sovereignty”, said Maduro.
The Energy Chamber of Trinidad and Tobago said the signing of the deal would allow for the export of gas as LNG and petrochemicals.
“Successful delivery of this initiative will help supply much needed energy, fertilisers and petrochemicals and assist global energy and food security,” it said.
The US imposed sanctions targeting Venezuela in 2018. In January this year, the Office of Foreign Assets Control (OFAC) provided a licence for the Dragon field.
Herbert Smith Freehills said the licence would allow PDVSA, Shell and Trinidad to work on gas exports from Dragon. One of the conditions was that some of the gas would be exported to Jamaica and the Dominican Republican.
However, the licence will only run for two years and the Maduro regime is frozen out of receiving any cash payments under the scheme.
Elias Ferrer, the found of Over the Hedge, commented this week that European companies and governments were increasingly interested in Venezuela’s gas potential.
“Foreign firms are willing to enter the scene and invest in renovating infrastructure, and the government seems ready to welcome them. The EU, in particular, is seeking to develop natural gas in a way that will considerably reduce greenhouse gas emissions,” Ferrer wrote.
Young, in a subsequent note, highlighted that the deal did not encompass the Loran-Manatee field.
Shell awarded a front-end engineering and design (FEED) study on Manatee to McDermott International in March this year. The plan involves a wellhead platform and export pipeline.
The Anglo-Dutch operator filed for environmental clearance on the Manatee field this week. Manatee lies in Trinidadian waters, with around 2.7 tcf of gas. The combined Loran-Manatee field – which straddles the border with Venezuela – may hold 10 tcf.
Shell may reach first gas from Manatee in early 2028.
Young has held talks with Shell officials this year on Manatee and the development of Venezuela’s Dragon field.
Separately, Young announced the cabinet had awarded three deepwater blocks to Shell and BP. The cabinet agreed the award on September 8 and the signing ceremony will take place on October 26. Reuters reported the deal was for Blocks 25A, 25B and 27, which are to the east of Trinidad.
The ministry said the water depth and distance from existing assets required “complex negotiations”. The award of the blocks marks a “new frontier in our country’s hydrocarbon development”, Young said.