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In August 2018, an agreement to import natural gas from the offshore Dragon field was made between the Trinidad & Tobago National Gas Company (NGC), Shell and the Venezuelan state-owned oil and natural gas company, Petróleos de Venezuela, S.A (PDVSA).

The imported natural gas will contribute to Trinidad & Tobago’s (T&T’s) strategy to mitigate the supply curtailments to its gas-based industries including the liquefaction plant operated by BP and Shell as well as its several petrochemical plants. The Dragon field, along with Patao, Mejillones, and Rio Caribe fields, is located in the Mariscal Sucre Complex area north of Paria peninsula in offshore Venezuela.

The core of the Dragon field agreement consists of building a 17km gas pipeline at a cost of $100m between the Venezuelan field and the Hibiscus platform off the North Coast in T&T, jointly owned by NGC and Shell. The Dragon field, which is to be operated by Shell, is projected to supply an estimated 150 million cubic feet per day in 2020, with plans to increase to 300 million cubic feet by 2022.

Figure: additional production from awarded fields in Mariscal Sucre Complex

Source: Upstream Analytics, GlobalData Oil and Gas. © GlobalData

In the short term, by 2022, the agreement seems to be beneficial to all parties. With 300 mmcfd available by 2020, T&T is reducing the likelihood that its ALNG plant has to reduce its output due to a low availability of domestic natural gas supply as experienced during the 2013-2016 period.

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By GlobalData

From the Venezuelan perspective the Dragon deal will allow the country to process and monetize in T&T its currently stranded natural gas field. The project development can be done relatively quickly and this will mean an additional and reliable source of revenue for the cash-strapped Venezuelan government.

Also a clear beneficiary of the Dragon deal is Royal Dutch Shell, operator on both Dragon and Hibiscus fields, and which is to take advantage from the agreement in the longer term. Shell is currently involved with both countries in finalising a development plan for the cross-border Loran-Manatee gas field, on which the two governments have been trying to agree for years.