Trinidad Asks US for Changes to Venezuela Offshore Gas Project License

Trinidad & Tobago and Venezuela Flags Credit: luzitanija/AdobeStock
Trinidad & Tobago and Venezuela Flags Credit: luzitanija/AdobeStock

Trinidad and Tobago is requesting the U.S. government amend the terms of a license authorizing the joint development of a promising offshore gas field with Venezuela, the Caribbean nation's energy minister said on Thursday.

The United States in January issued a 2-year authorization for Trinidad and a group of companies including Venezuelan state-run oil firm PDVSA and Anglo-Dutch Shell to revive a dormant project that could help Trinidad boost gas processing and exports to its neighbors.

However, the U.S. authorization for the Dragon project, near the maritime border between the two nations, bans any cash payments to Venezuelan President Nicolas Maduro's government or its state companies.

Trinidad Prime Minister Keith Rowley and Energy Minister Stuart Young have recently talked to U.S. Presidential Coordinator for International Energy Security Amos Hochstein and U.S. Vice President Kamala Harris' staff to explain the proposed changes. In part, they are related to the financial terms, Young told Reuters on the sidelines of the 7th International Energy Summit in Miami.

"There are still some changes that need to be made that we're pursuing. But that is always part of very complicated and sophisticated energy negotiations," the minister said. He declined to elaborate.        

PDVSA, Venezuela's oil ministry and the U.S. White House did not immediately reply to requests for comment. The Treasury Department declined comment.

Trinidad and Venezuela are expected to meet again this month to begin discussion of Dragon's commercial terms. Both parties signed confidentially agreements and began discussing technical aspects in previous meetings.

The U.S since last year has eased some sanctions on Venezuela by issuing or modifying specific licenses to encourage political negotiations towards presidential elections in the country. Those talks have shown little progress.


GAS IN DEMAND

Trinidad this month plans to disclose winners of a bidding round for onshore and shallow-water blocks in the country, after evaluating the offers, Young said.

Negotiations with BP and Shell on the terms for exploring and developing deepwater oil and gas blocks awarded in a separate auction also could finish soon, he said.

Both rounds are part of Trinidad's push to secure a rebound in natural gas production and processing to increase exports of liquefied natural gas (LNG), petrochemicals and ammonia.

Trinidad is not producing enough gas to fully feed its industry, leaving spare capacity for processing and transforming the fuel into valuable products. It has invited countries and companies to use its processing facilities.

The energy ministry also expects to announce by early in the fourth quarter a new ownership structure for the country's flagship LNG project, Atlantic LNG. That facility has one liquefaction train idle due to lack of supply.

Young declined to provide details on the new structure, but said that "at this stage, train one is really not in the equation going forward." 

The government has positive expectations on first gas to come from several offshore projects, in particular Manatee by Shell and Calypso by Woodside Energy, which are in the pre-engineering and design phases.

"We're doing all that we can, and we're working with all of our stakeholders on the gas production," he said.

(Reuters - Reporting by Marianna Parraga; Editing by Gary McWilliams and Daniel Wallis)

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