EXCLUSIVE – Trinidad asks US to allow Venezuelan gas imports for LNG plant

Under U.S. sanctions, companies and governments must obtain approval from the U.S. Treasury Department to do business with Venezuelan oil giant PDVSA.

Trinidad’s previous requests for US approval have gone unanswered, but the US Biden administration’s willingness to ease some sanctions against Venezuela could provide another opportunity if President Nicolas Maduro and the opposition make progress in presidential talks.

The gas reportedly came primarily from Venezuela’s Dragon field on the country’s east coast, where PDVSA has discovered 4.2 trillion cubic feet of reserves. The project was headed for production nearly a decade ago, but stalled due to lack of capital, partners and obstacles.

If the gas is approved, a halted liquefaction train of Trinidad’s flagship Atlantic LNG project with a capacity of 500 million cubic feet per day (cf/d) could be restarted. The facility is mainly owned by Shell, BP and Trinidad and Tobago’s (NGC) state-owned National Gas Company.

The US Treasury Department did not comment. Shell and NGC cited the country’s energy ministry, which did not respond to a request for comment. BP did not immediately respond to a request for comment.

“We need access to additional natural gas supplies next to proven gas reserves in Venezuela,” Trinidad’s Energy Minister Stuart Young said last month.

Years of work

Trinidad is the largest exporter of liquefied natural gas (LNG) in Latin America, with an installed capacity to process 4.2 billion cf/d into LNG, petrochemicals and electricity. But gas production is less than 3 billion cf/d.

Even if Washington accepts Trinidad’s request, bringing Venezuelan gas to Trinidad and LNG to Europe could require years of investment and development.

“They don’t see the Trinidad solution as immediate enough for Europe,” said one of the people familiar with the matter.

It is expected that intensive engineering work and subsea surveys will be required to verify the integrity of the wells.

Initial talks between Trinidad and Venezuela focused on building a 17-kilometer gas pipeline to connect the two countries, the sources said.

A pipeline originally carrying Dragon’s gas was acquired by the Colibri Offshore Project between Shell and Trinidad’s Heritage Petroleum Co, which has been supplying gas since March.

That plan follows a revised production-sharing agreement for the Manatee gas field in Trinidad, which extends to Venezuela’s Loren field.

But despite years of efforts to reach an agreement to jointly develop gas reservoirs, Venezuela’s fields are completely at a standstill without any infrastructure. Maduro gave the green light for the Trinidad company to start gas production from his side in 2020.

Trinidad Treasury Secretary Colm Imbert told a business meeting last week. “He’s the liaison between the U.S. and Venezuela…he’s been working on all that planning and trying to hook the U.S. and get Venezuela to send us gas.”