CMC – Trinidad and Tobago and Venezuela have signed a licence agreement regarding the profit-sharing accord with Caracas to export gas from the South American country’s Dragon gas field.
Minister of Energy and Energy Industries and Minister in the Office of the Prime Minister, Stuart Young, who signed the agreement in Caracas regarding the 4.2 trillion cubic feet Dragon project on Thursday night, told a news conference “that as of nine o’clock last night … the licence for the exploitation and production of gas from Dragon now resides with Trinidad and Tobago with full commercial terms”.
He said the producers would be Shell and the National Gas Company (NGC) and that there will be an equity player in the exportation and production of the gas to Trinidad and Tobago “at a competitve price that will benefit the peoples of the two countries”.
Young, who signed the licence agreement with Venezuelan Oil Minister Pedro Tellechea which was witnessed by Venezuelan Vice President Delcy Rodríguez, said “ I can say without fear of contradiction we have the legal documentation in hand, we are now the holders of the official licence for the Dragon gas.
“We have remained engaged with all of the stakeholders, including the United States at every step of the way and most importantly with the Venezuelan government at the highest levels and today we have that in addition to what we announced at the beginning of December, which is a restructured LNG …which opens up a new market.”
In January, the United States waived sanctions against Venezuela, clearing the way for the twin island republic to develop the Dragon gas field and in October, Young updated Parliament on the project, which has remained stalled for more than a decade due to lack of investment and, more recently, US sanctions on Venezuela.
Prime Minister Dr. Keith Rowley told the news conference that he was pleased that the negotiators on both sides had been able to “hammer out an agreement that allows today to have the signatures of Trinidad and Tobago and Venezuela on this document which is the golden fleece”.
He said the agreement allows Trinidad and Tobago to exploit natural gas in a gas field “outside of our border, inside the border of Venezuela with the approval of the government and people of Venezuela”.
“This agreement is between two sovereign states. It is between the government of Trinidad and Tobago and the government of Venezuela and we then detailed and identified operators of the licence.”
“In our case, our partner and operator would be Shell. In Venezuela it would be Petroleos de Venezuela SA (PDVSA), the Venezuelan state company,” Rowley said, describing the agreement as a “historic development and a historic day for the people of Venezuela and the people of Trinidad and Tobago”.
He said Venezuela is merely seven miles by sea from Trinidad and Tobago and to have entered into this agreement this year ”to open this door to allow us, the infrastructure on the ground in Trinidad to access and process the raw material from below the ground in Venezuela puts the two nations in a position to play a bigger and beneficial role in the world economy and for the benefit of the people of Venezuela and Trinidad and Tobago”.
“This Dragon agreement is the first of what I anticipate will be many between Trinidad and Tobago and Venezuela and it has nothing to do with today’s politics and who is in office today. It has to do with who are the people of Venezuela and who are the people of Trinidad and Tobago and as long as we remain neighbourly with respect for each other, acting in good order, this is sustainable for a long, long time.”
Rowley said that for Trinidad and Tobago, the licence agreement allows the country to be “in a position to access more gas, to keep us in the business longer”.
He said for Venezuelans it means having access to the international markets and to benefit from the earnings from this operation.
Earlier, in a message posted on his Facebook page, Rowley said “we have secured the licence to the Dragon gas field! Yes, in the spirit of good neighbourliness, the dragon can dance.”
Meanwhile, the Energy Chamber of Trinidad and Tobago in a statement said securing the licence for the Dragon gas field will give a major boost to the energy sector and the economy.
“This is a very significant development for the energy industry in Trinidad and Tobago. The announcement represents an important further milestone in the plans to import natural gas from Venezuela for use in our well-developed existing downstream gas industry and LNG export facilities”
“This natural gas will help return the mid and downstream infrastructure in Trinidad to capacity utilisation and will provide the world with a much-needed secure source of LNG and petrochemicals, such as methanol and ammonia,” the Chamber said, adding that it was looking forward to “further updates as the commercial and technical agreements are finalised”.
For its part, NGC praised the efforts of all the stakeholders involved in the project, noting that “all parties worked steadfastly and amicably to bring this significant signing one step closer to operationalising gas production from Dragon.”
It said that in the short term, the immediate benefits to be obtained from the Dragon field is the potential to “buttress gas supplies and by extension energy industry development in the twin-island”.
“The signing has strengthened and deepened energy relations between Trinidad and Tobago and Venezuela and opened prospects for the future development of other cross-border and across-border gas reserves between both countries.”
NGC said it is “excited to work collaboratively with all the parties to progress the Dragon deal and will continue to explore and leverage opportunities in support of its strategic objective of growing locally and internationally to maximise benefit to the citizens of Trinidad and Tobago”.
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