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(CMC) — Prime Minister Dr Keith Rowley says the gas agreement signed with Venezuela late last month provides an opportunity for Trinidad and Tobago to grow in the medium term and diversify the country’s gas supply base.
“This initiative, for us, is about opening new doors towards securing our future in an increasingly competitive international business. We’ve done it,” Rowley said in a radio and television broadcast Sunday night.
The agreement was between the National Gas Company (NGC), the Venezuelan NGC, Shell, and the Venezuelan State-owned oil and natural gas company, Petróleos de Venezuela, SA (Petroleum of Venezuela).
The Government has already announced that the pipeline carrying the gas from Venezuela’s Dragon gas field in eastern Venezuela to Shell’s Hibiscus platform off the north coast will be built and owned in a joint venture between the NGC and Shell Trinidad. The estimated cost of the construction of the pipeline is more than one billion dollars.
The Dragon field is located within Venezuela’s maritime territory, just off the north-west coast of Trinidad. It is close to the Hibiscus platform, jointly owned by the Trinidad and Tobago Government and Shell.
Shell, also the operator of Dragon, is helping the Trinidad and Tobago Government develop and process gas from Loran-Manatee, located off the south-east coast of Trinidad, which spans the maritime borders of Venezuela and Trinidad and Tobago.
The Loran-Manatee field has an estimated 10.25 trillion cubic feet of gas, of which roughly 74 per cent belongs to Venezuela with 26 per cent belonging to Trinidad and Tobago.
In recent days the Trinidadian Government has come under increasing pressure to make public the agreement signed with Caracas, with Opposition and trade unions linking the closure of the oil refinery at the State-owned oil company, Petrotrin, to the accord.
In his address, Rowley said that Trinidad and Tobago is heavily dependent on its involvement in the natural gas industry by way of the processing and export of natural gas or gas-based products, such as methanol, fertiliser and other products.
“In fact, during the last 15 years or so our economy has become increasingly much more dependent on the revenues from gas as against earnings from oil. Even more recently we have been experiencing sustained gas curtailment to our Point Lisas plants, and our national reserves have been dwindling; there were even actual plant closures, with more concerns looming on the not-too-distant horizon.”
He said soon after his Administration came to office in 2015, it negotiated and settled a gas price with its major upstream companies, resulting in a multi-billion-dollar exploration and production frenzy in fields within the country’s borders.
“We opened, negotiated and settled key outstanding gas contracts with the downstream gas users at Point Lisas. Even as some new gas is beginning to come on stream and there have been some interesting successes in some new areas, so far we are really working very hard to replace what we are consuming with an eye on overall growing reduction in our reserves.
“Under these circumstances, we opened discussions with Venezuela to get agreement on access to their large proven gas fields, just across our border. These reserves are economically and logistically more marketable from Trinidad than from Venezuela. Success in such an initiative would provide an extension of our involvement in the gas business, while it provides opportunity for Venezuela to monetise some of its gas which otherwise would not get to market in any foreseeable time frame. “
Rowley said that following intense negotiations, an agreement was signed late August and “for the first time, clears the way for the construction of pipeline infrastructure to allow us access to a Venezuelan gas field.
“This historic development, built on the time-honoured diplomatic principle of good neighbourliness for the benefit of both nations, established a competitive gas pricing mechanism which is sufficiently attractive to excite development of the Dragon field, which is north west of us, as well as on the south coast cross-border fields which we share with Venezuela.
“It gives us some potential to grow in the medium term and diversify our gas supply base, even as it almost immediately adds to the pool of what is available for current needs. This initiative, for us, is about opening new doors towards securing our future in an increasingly competitive international business. We’ve done it!”
Rowley said as a result of the priority and the attention that his Administration has given to the development of the gas sector, “I can today report to you that our gas industry and our future in this business that is so critical to our well-being, whilst not perfect yet, is in much better shape than it was three years ago”.