ENERGY Minister Franklin Khan said the ministry received a signature bonus of US $80 million on signing new production sharing contracts (PSCs) with Shell.
He was responding to a question in the Senate Wednesday on the energy agreement between Shell TT and the Government.
Khan said the agreement covers Shell’s production-sharing contracts for its East Coast Marine Area (ECMA) comprising Block 5a, Block 6, Block E and Block 5c and in the North Coast Marine Area (NCMA) 2, its Colibri project comprising NCMA 4 and Block 22. He reported the commercial terms of the LNG marketing arrangements for gas from these blocks were improved and the terms of the ECMA PSCs Block 5a, Block 6 and Block E have been extended to 2030 and NCMA 1 to 2035.
“The quantum of the enhanced revenue accruing to Government will be dependent on the global market for LNG and will be realised over the period 2019 to 2022.”
He explained the pricing regime for LNG will be based on one-third Brent, one-third JKM and one-third NBP, which is superior to existing regimes that is Henry Hub and the Spanish market, and therefore will be an improved return to Government. Khan reported that Shell is projected to spend in excess of US $1 billion in development works over the period 2019-2021.
“These works are geared to maintain production in its ECMA blocks and NCMA 1, and in bringing on stream new production from its Colibri project and Block 5c.” He said first gas from Block 5c is projected for 2021 and from the Colibri project in 2022.