US approves Trinidad and Tobago/Venezuelan gas deal – DRAGON DANCES AGAIN

WITH the US Office of Foreign Assets Control (OFAC) granting Trinidad and Tobago a waiver to explore the Dragon natural gas field in Venezuela, the Prime Minister said "happy" days are ahead for the country and Caricom region.

The US$1 billion deal was signed between TT and Venezuela in August 2018. Those involved included energy giant Shell, Venezuela’s state oil company PDVSA, and TT’s National Gas Company (NGC).

The Dragon deal would have seen TT developing the field which is estimated to produce approximately 150 million standard cubic feet of gas a day. The gas was supposed to be imported through a billion-dollar pipeline to the Hibiscus platform off the northwest coast of TT. The platform is jointly owned by the TT government, NGC and Shell.

The deal was left in limbo after the US imposed sanctions on Venezuela in 2019.

At a media conference on Tuesday, the Prime Minister said since then he led the charge to sway the US’ hand, lobbying not only for TT but for all of Caricom.

“The US Government has today approved TT development of the Dragon field via a waiver on sanctions with specific terms to be finalised,” he announced at the Diplomatic Centre, St Ann's

Dr Rowley said one of the terms of the waiver was that Caricom be given preferential treatment for greater energy security in the region. Cuba is not to benefit from this waiver as it still remains under sanctions by the US.

“Today is a significant and happy day for me and my team, the people of TT and the people of Caricom. This is a significant development with far reaching consequences.”

THANKS TO USA

Rowley then took the time to thank several world leaders including the US President and Vice President, Joe Biden and Kamala Harris, California Congresswoman Maxine Waters and politicians from both sides of the US political divide. He also thanked the prime ministers of Suriname, Chan Santokhi; Bahamas, Philip Edward Davis; Barbados, Mia Mottley; Antigua and Barbuda, Gaston Browne and President of Guyana Dr Irfaan Ali for assisting in the push for TT to explore the Dragon field.

In a media release on Tuesday, the US Embassy said the Vice President told Rowley that the Treasury Department would take action to help meet the region’s long-term energy needs.

US Ambassador Candace Bond said: “Today we reinforce the closeness, strength, and depth of our over 200 years of friendship and cooperation. We share Trinidad and Tobago’s urgency in contributing to global energy and food security. We have listened to the Government of the Republic of Trinidad and Tobago’s message that it has the capacity and willingness to ameliorate economic and humanitarian crises around the region and the world.”

Rowley said that while the terms of the provisional licence are still being hammered out, the highest hurdle of the lifting of the sanctions was crossed. Part of the terms is that Venezuela is not to be paid in cash. Asked how this will work, Dr Rowley said that will not be a problem, reminding the population of a time when, because of sanctions, the Venezuelan government asked TT to purchase necessities on its behalf so a similar approach could be made.

Another term is that the waiver is for two years, eight short of what Rowley was negotiating for. He added though that the option to extend is there and he remains optimistic. He described the waiver as a “win win” all around but could not say when the first financial benefit will hit TT’s coffers adding that the deal is moving “full speed ahead.” He emphasised that the market is ready and eager as those in the US were asking how soon can production begin. He highlighted that the deal will mean energy security in the region which will also mean energy security in the US.

Asked whether the waiver will mean the restarting of Atlantic LNG's (ALNG) train one, which has been shut down since November 2020, Rowley said he is unable to answer at this time.

“The first hurdle we have is to maintain the level of unitisation that we have. We are at peak. We were producing about 1 billion cubic feet of gas a day because of our old maturing fields. We are producing 2.8 billion cubic feet a day now so there is considerable gap” adding that the hope is to reach approximately four billion cubic feet.

He said once there is enough gas then train one will become operational and the first hurdle now is to sustain consumption. With TT now a shareholder in trains two to four, unlike before, Rowley said this places the country in a better position instead of having to find enough gas to satisfy the running of train one. ALNG shareholders and government have agreed to the unitisation of all four trains.

'DON'T GET AHEAD OF OURSELVES'

The waiver, Rowley said, is also good for the development of the Loran-Manatee gas field, which sits on the TT/Venezuela maritime border.

“Now that we've got the giant step towards exploiting gas from a Venezuelan field across the border, it opens all kinds of possibilities for business between two neighbours. One that has world class infrastructure like Point Lisas and a neighbour that has a large amount of unproduced natural gas.

“If you look at Europe and Australia, you will see how countries with the raw material supply economies that require that. The best example of that in the world is Japan, which became the second largest economy in the world using resources from countries outside of Japan."

Rowley said he did not want to “get ahead of ourselves.” He said the country is moving towards producing its 27 per cent from the joint gas field but there is a great economic benefit to continuing, which will be looked at later on.

Regarding who will pay for the pipeline from Venezuela to TT, Rowley said those details are to be worked out, adding that TT will not shy away from such an investment as the government sees the benefits of it.

At the PNM’s 67th anniversary at the National Academy for Performing Arts on Sunday, Rowley told the gathering that the country faced "bumpy roads" ahead given economic challenges.

Asked if he was reviewing this viewpoint, Rowley said: “I did say that the future is not a smooth sailing, but there are bumps in the way. It's a roadway, it’s relatively smooth, but we do have some challenges along the way you have to pay attention to.”

Asked about the expected financial returns Rowley said it is, “a lot” but could not give exact figures.

Opposition Pointe-a-Pierre MP and shadow energy minister David Lee in response said he remains guarded on the details of the waiver.

Speaking to Newsday after the media conference, Lee said he awaits more details.

“I don't know the details, but at this point in time, it cannot be as straightforward as the original agreement that Trinidad had with (Nicolas) Maduro. I hope that the Prime Minister will make a comprehensive statement in Parliament of the details of this licence between the US government dependency and modern trade.”

The Prime Minister was expected to meet with Venezuelan ambassador Alvaro Sanchez Cordero last evening to discuss the development.

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