Venezuela’s natural gas deal with Trinidad and Tobago, strengthens Shell’s LNG value chain whilst providing much needed revenue, says GlobalData
Following the recent signing of a deal between Petróleos de Venezuela (PDVSA), The National Gas Company of Trinidad and Tobago Ltd (NGC) and Shell that will allow for Trinidad and Tobago to process natural gas from the offshore Dragon field in Venezuela,
Adrian Lara, Senior Oil and Gas Analyst at GlobalData, a leading data and analytics company, offers his view on the impact on the upstream sector:
“In a way Shell has probably benefited the most from the troubled situation in both countries. As operator of both fields, Dragon in Venezuela and Hibiscus in Trinidad and Tobago (T&T), the company is now in a position of strengthening its complete Liquefied Natural Gas (LNG) value chain in Trinidad. In fact they are also involved in developing a plan to move gas from the Loran-Manatee field located across the maritime border.
‘‘Obviously the deal is also quite important for both countries because Venezuela desperately needs additional sources of revenue and T&T has had trouble in supplying enough gas to their LNG and petrochemical plants. Somehow Venezuela’s need for cash made this deal possible more quickly. Actually now, even the Loran-Manatee gas field, a cross-border asset and one on which the two governments have been trying to agree for years on how to develop jointly, is looking plausible.
“What is also interesting is that two other fields nearby the Dragon field, Mejillones and Patao, have been awarded to the Russian gas company Rosneft with the right to export the production as gas or LNG. Regardless of what the development strategy is for exporting the production, having takeaway capacity installed to move it to T&T can add a positive dynamic to these undeveloped gas offshore fields.”