Dragon Gas Deal to be signed on Saturday in Venezuela

After nearly two years of negotiations between this country and Venezuela, the deal that will allow Trinidad and Tobago to process gas from the Dragon gas field was expected to be finalised today.

Yesterday, a release from the Office of the Prime Minister (OPM) said the agreement on the final terms for the development of the across the border gas from Venezuela’s Dragon gas field will be signed tomorrow by representatives of the National Gas Company, Venezuela’s state oil company, PDVSA, and Shell, the multinational energy giant with the rights to drill the Dragon field.

OPM said A “high-level Venezuelan delegation” will also participate, along with representatives of the TT Government, to witness this “historic event.”

In late June, Stuart Young, then a Minister of State in the Officer of the Prime Minister, said while discussions were almost complete, price was the main sticking point.

In December 2016, Prime Minister Dr Keith Rowley had visited Venezuela, and along with that country’s President, Nicolas Maduro, signed an agreement that put the plan in motion for TT to process Dragon’s gas.

First gas then was estimated by 2020; that timeline is still on track. Young had given reporters a timeline of 18 months to two years to get first gas here—providing the deal is signed soon.

A special purpose vehicle between multinational energy giant Shell and the National Gas Company (NGC) has been created to lay down the infrastructure; Shell’s pipelines, including those in the North Coast Marine Acreage will be used to transport Dragon’s gas to the Hibiscus platform off the north-west coast of Trinidad and only 18 kilometres away from the gas field.

Hibiscus is jointly owned by the TT government and Shell. The first tranche of Dragon’s production will yield about 150 million standard cubic feet of gas per day (mmscfd), or 26,505 barrel of oil equivalent per day (boed).

For comparison, Petrotrin produces 43,000 barrels of oil per day and 130 mmscfd; bpTT’s Juniper well, which came on stream in the latter half of 2017, produces about 590 mmscfd.

The Dragon field is part of the Mariscal Sucre natural gas complex off the Caribbean coast of Venezuela, north west of Trinidad. That Dragon is just one of the fields in a total acreage reserve of 14.7 trillion cubic feet of gas. Dragon alone contains 2.4 tcf.

However, with concerns over yesterday’s 6.8 magnitude earthquake, this has led to a date and time change for the much-anticipated Dragon gas deal signing ceremony.

The signing initially scheduled for today will now take place on Saturday in Caracas, Venezuela. This was announced by the Communications Ministry in a media release late last night.

“This was requested and acceded to due to the concerns about the earthquake today,” the release said. Communications Minister Stuart Young has been leading the Dragon deal since its inception nearly two years ago.

The Prime Minister will lead the TT delegation, which will include representatives of the National Gas Company (NGC). Other government ministers, representatives from Shell – which has the rights to drill in the field – and officials from Venezuela’s state oil company PDVSA are also expected to attend.

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