Dragon agreement to be signed soon

THE governments of TT and Venezuela are expected to sign off an agreement to develop the Dragon gas field “any time now,” Prime Minister Dr Keith Rowley has said. “We have one outstanding issue that we are close to conclusion on and we are on standby to conclude that any time now. I won’t say much more than that,” Rowley said on Thursday at the post-Cabinet media briefing, Diplomatic Centre, St Ann’s.

The Dragon field is located within Venezuela’s maritime territory, just off the north-west coast of Trinidad. It is close to the Hibiscus platform, jointly owned by the government of TT and Shell.

Shell is also the operator of Dragon. The deal will hopefully see Venezuelan gas from Dragon transported to Hibiscus and then to Point Fortin, where Atlantic will turn it into liquefied natural gas (LNG). “That’s the plan we’ve been working on for the last three months,” Rowley said.

Shell is also the helping the government develop and process gas from Loran-Manatee, which is off the south-east coast of Trinidad, and spans the maritime borders of Venezuela and TT.

Dragon was just one of the issues a team, led by Rowley, dicussed when it met Shell officials in London, UK, last week. Top of the agenda was how best contracts for LNG should be negotiated to consider marketing and fair returns for both the company and the government. Shell recently returned to Trinidad in a big way after the company merged with British Gas in 2016 and subsequently acquired BG’s assets, as well as some smaller holdings– including a major stake in Atlantic.

“Shell’s presence in TT has to be understood and managed. We have received a commitment from Shell to expand and accelerate Operations in TT because they have seen there is good potential in our hydrocarbon basin,” Rowley said.

Shell has indicated a desire to work with the government and other shareholders at Atlantic to simplify the arrangements and increase the government’s revenue stream from LNG, he said, and has thus provided the government with an interim proposal on how to do that, especially after the government had informed shell of possible loss of revenue through revenue leakage in the LNG business and noted that the returns to the Treasury are not what they should be.

“Parties need to work together to simplify the LNG arrangement in a transparent manner leading to a fair rate of return to Shell and the government,” he said. Rowley also announced that to the parties agreed to establish “empowered negotiation teams” that will meet from the middle of May to work out the negotiations.

The government’s team will be given the authority to make binding decisions on its behalf.

It will also work on contract negotiation with BP, Rowley noted. He said the team had not been finalised yet, but Cabinet will sign off on the names next Thursday. It will, however, include members of the energy sub-comittee of Cabinet, Poten and Partners, who drafted the gas master plan, and New York City-based law firm White and Case, who Rowley said the government had retained because of their experience in negotitating gas deals, yet had no conflict of interest with any of the energy companies.