Shell plans to deliver gas from Venezuela to Trinidad by 2026, according to sources

Shell Plc aims to start producing natural gas in Venezuela's Dragon field and export it to Trinidad and Tobago, an hour earlier than the initial 2027 start date.

The project demonstrates the industry's hope that sanctions against Venezuela will remain in place despite recent tighter enforcement. The people stated that the partners intend to begin survey work in January and decide to drill three wells. They will also need to renew their U.S. licence later this year.

U.S. sanctions are aimed at virtually the entire Venezuelan gas and oil industry which is controlled and owned by PDVSA, the state-owned company. This means that countries such as Trinidad, and private operators who adhere to the measures, need U.S. approvals to export revenue or to pay it to sanctioned entities, including the government, central bank, and PDVSA.

This U.S. authorization license was granted to Dragon in the beginning of 2023, and later extended through October 2025. Trinidad's National Gas Company confirmed that the license is still in force. The statement said that NGC and Shell are continuing to work on the Dragon Project, and they remain committed to reaching first gas as quickly as reasonably possible.

Shell has not responded to a comment request.

Last month, Trinidad's government said that it would brief Washington about the importance of maintaining U.S. licensing to develop gas with Venezuela in order to ensure regional energy security.

Shell is trying to secure gas supplies in order to increase production of liquefied gas at Trinidad's Atlantic Liquefied Natural Gas project.

According to preliminary data, the Atlantic LNG flagship project produced 8.5 millions metric tons last year, which is 4 million tonnes less than its installed capacity due to insufficient gas.

BP, another major shareholder of Atlantic LNG, has announced earlier this month that it will decommission its first liquefaction plant, which had been idled since 2020 due to a lack of gas.

Dragon is estimated to have 4 trillion cubic feet in gas reserves. It's just across the border from Trinidad, which has a pipeline that connects the Atlantic LNG facility.

Shell will begin an environmental baseline study in April, which will include a look at sea waves, currents and earth movements, as well as marine life. This survey is part of the engineering for the construction of a pipeline that would run from Dragon's facilities in Trinidad to ten miles (16 km).

Venezuela granted Shell and NGC a license for 30 years in 2023 to explore and produce gas from the field. Shell will make a final investment decision this year after Washington makes a decision on the extension of its U.S. licence.

Washington terminated earlier this month a license that was essential for the U.S. oil giant Chevron to be able to operate in Venezuela. Trump's administration has been sending signals that it will take a tougher stance against Venezuela. The U.S., however, has not yet announced any cancellations of licenses relating to energy projects between Venezuela Trinidad. Reporting by Curtis Williams, Houston. Peter Henderson, Mark Potter and Mark Henderson edited the article.

(source: Reuters)