There is a pe­cu­liar mood in parts of Trinidad and To­ba­go’s en­er­gy de­bate, es­pe­cial­ly as it re­lates to cross bor­der gas with Venezuela. It in­volves an un­der­cur­rent that tries to cre­ate doubt that Venezue­lan gas would reach our shores.

Cer­tain sec­tors are quick to po­si­tion ev­i­dence that Trinidad is about to be by­passed as if this is some­thing that we should ap­plaud. It is pos­si­ble, of course, to be cau­tious about Venezuela. One should be. But cau­tion is not the same as will­ing a na­tion­al op­por­tu­ni­ty to col­lapse.

The irony is that many of these voic­es were a few years ago la­belling oth­ers as “naysay­ers” and “un­pa­tri­ot­ic” for ex­act­ly the same per­cep­tion. That by it­self is ex­pect­ed. The re­al prob­lem is that parts of the pub­lic con­ver­sa­tion have be­come so politi­cised that tech­ni­cal facts are be­ing ad­min­is­tered through par­ti­san lens and we have a me­dia, which for what­ev­er rea­son, has opt­ed out of pro­vid­ing the pub­lic with ob­jec­tive fac­tu­al analy­sis.

Take for ex­am­ple the Drag­on Gas arrange­ment. What we had lead­ing in­to the 2025 elec­tion was a re­al agree­ment be­tween T&T and Venezuela. But that agree­ment was not ful­ly bank­able which means that there were sig­nif­i­cant gaps to fill in. It was not a done deal.

If we are to ac­cept, that the then Maduro ad­min­is­tra­tion, was able to uni­lat­er­al­ly re­scind the agree­ment as they claimed to have done, then the log­i­cal con­clu­sion is that while there was an agree­ment on pa­per, it was not en­force­able in law.

Ap­pre­ci­ate where T&T’s po­si­tion would have been in such an en­vi­ron­ment. We would have been be­lon­den to the whims of Cara­cas which could have re­sult­ed in neg­a­tive so­cial im­pli­ca­tions for T&T.

I have record­ed in this space the mount­ing of a Petrotrin rig in 2012 by the Venezue­lan au­thor­i­ties on sus­pi­cion of it be­ing in Venezue­lan wa­ters. We have had in­ci­dents with lo­cal fish­er­men and cur­rent­ly there are is­sues be­ing raised about oil spills. Venezuela has shown a re­al abil­i­ty to pro­tect its bor­ders and their na­tion­al in­ter­ests, which is good.

Now jux­ta­pose that abil­i­ty against the es­tab­lished record of mi­grant traf­fick­ing, hu­man traf­fick­ing, nar­co and gun traf­fick­ing that orig­i­nates from Venezuela. It should be clear that there was not on­ly a tac­it ap­proval of these ac­tiv­i­ties on the Venezuela side un­der Maduro but al­so, that if we were to “anger” them in the pur­suit of ad­dress­ing these is­sues con­struc­tive­ly that they could al­so “rip up” the agree­ment down the road.

That isn’t a good place to be in and so while a Drag­on ex­plo­ration and pro­duc­tion li­cence was is­sued to NGC and Shell on De­cem­ber 21, 2023, for the ex­port of 100 per cent of Drag­on gas to Trinidad and To­ba­go, it came with much more risks than we are pre­pared to ac­knowl­edge.

Agree­ment

Drag­on car­ries with it a doc­u­men­tary record of a project de­signed to use Trinidad’s ex­ist­ing en­er­gy in­fra­struc­ture in spite of any ten­sions that may cur­rent­ly ex­ist be­tween both na­tions. This is be­cause it’s the fastest com­mer­cial path to mon­eti­sa­tion. The pub­lished li­cence terms re­port­ed in Trinidad and by Reuters de­scribed a 30-year li­cence, a Venezue­lan state in­come floor of no less than 45 per cent of the li­censees’ gross in­come, and a des­ti­na­tion split in which 70 per cent of the gas would go to At­lantic LNG and 30 per cent to the petro­chem­i­cal sec­tor in Point Lisas.

If what was pre­vi­ous­ly ne­go­ti­at­ed holds, then Venezuela is gain­ing a re­turn on rev­enue with­out the capex and pro­duc­tion risks. When you add time to mar­ket with T&T in­fra­struc­ture, it rep­re­sents an at­trac­tive val­ue propo­si­tion for Cara­cas in dire need of funds for re­de­vel­op­ment.

The prob­lem is that what was orig­i­nal­ly ne­go­ti­at­ed wasn’t ex­e­cutable. The orig­i­nal Row­ley/Young/Maduro track car­ried three bur­dens that could not be wished away: US sanc­tions risk, cred­i­tor risk and as I al­ready point­ed out, con­tract en­force­ment risk.

The Oc­to­ber 2023 OFAC amend­ment gave GORTT, NGC and Shell space to plan, fi­nance, de­vel­op and man­age Drag­on; it al­so per­mit­ted pay­ments to Venezuela for tax­es, roy­al­ties, fees and lease bonus­es, in­clud­ing in US dol­lars or bo­li­vars. But it ex­pired on Oc­to­ber 31, 2025. That ex­piry date neg­a­tive­ly im­pact­ed the project’s cap­i­tal de­ci­sion.

Shell’s po­si­tion then ver­sus now high­lights the prob­lem. In April 2024, Reuters re­port­ed that Shell was seek­ing a longer US li­cence be­fore mak­ing a fi­nal in­vest­ment de­ci­sion on Drag­on. The com­pa­ny was said to want the cer­tain­ty re­quired for an in­vest­ment of more than US$1 bil­lion, with a 15-year li­cence dis­cussed by sources. A two-year li­cence win­dow was in­suf­fi­cient to jus­ti­fy this lev­el of cap­i­tal ex­pen­di­ture.

Then came the Cono­coPhillips com­pli­ca­tion. Trinidad’s courts recog­nised Cono­coPhillips’ US$1.33 bil­lion claim against Venezuela, open­ing the door to en­force­ment against com­pen­sa­tion streams con­nect­ed to joint gas projects. It cre­at­ed a se­ri­ous bank­a­bil­i­ty prob­lem. Even if there was a route to ac­cess the phys­i­cal gas, the mon­ey route was con­test­ed and un­clear.

The sub­se­quent US re­vo­ca­tion of Trinidad/Venezuela gas li­cences in April 2025 vin­di­cat­ed the con­cern. Reuters re­port­ed that the re­vo­ca­tion hit projects in­volv­ing Shell, BP and NGC, im­posed a May 27 wind down dead­line, and stopped pay­ments to Venezuela re­lat­ed to the projects. No se­ri­ous in­vestor could ig­nore that prece­dent. It proved that the orig­i­nal sanc­tions ar­chi­tec­ture was po­lit­i­cal­ly re­versible.

This is why the cur­rent route should not be analysed as a sim­ple con­tin­u­a­tion of the old deal. OFAC’s 2026 Gen­er­al Li­cence 50A is not a blank cheque. It au­tho­ris­es cer­tain oil and gas trans­ac­tions in­volv­ing list­ed en­ti­ties, in­clud­ing Shell, but re­quires con­tracts with Venezuela, PDVSA or PDVSA en­ti­ties to be gov­erned by US law with dis­pute res­o­lu­tion in the US. It al­so re­quires oil and gas tax­es or roy­al­ties payable to Venezuela, PDVSA or PDVSA en­ti­ties to be paid in­to For­eign Gov­ern­ment De­posit Funds or an­oth­er US Trea­sury di­rect­ed ac­count.

That changes the po­lit­i­cal econ­o­my of the project. For Trinidad and Shell, the new ar­chi­tec­ture may be more bank­able be­cause it of­fers clear­er le­gal and pay­ment con­trols. For Venezuela, it may be less at­trac­tive than un­re­strict­ed cash re­ceipts. But that is pre­cise­ly the point: a cred­i­ble Drag­on project has to sat­is­fy Wash­ing­ton, Shell, Trinidad, Venezuela and cred­i­tors. This did not ex­ist up to now.

Lo­ran

Let’s switch fo­cus to the Lo­ran/Man­a­tee field. This re­in­forces rather than weak­ens the ar­gu­ment that we are in a bet­ter po­si­tion now to ex­e­cute on cross-bor­der gas re­serves. Shell has been de­vel­op­ing Man­a­tee on the Trinidad side, while Lo­ran lies across the mar­itime bound­ary in Venezuela. The re­port­ing sug­gests that Shell’s in­ter­est in Lo­ran is be­cause of its prox­im­i­ty to Man­a­tee, with one source de­scrib­ing a plan to drill sub­sea wells on the Venezue­lan side and tie them back to the Man­a­tee plat­form in Trinidad. The time­line is for Man­a­tee first gas in 2027 with in­creased pipeline ca­pac­i­ty to Trinidad.

Against that back­ground, some re­cent com­men­tary about al­ter­na­tives to Trinidad and the use of the At­lantic LNG fa­cil­i­ty to mon­e­tise Venezue­lan gas has been tech­ni­cal­ly weak. Last week’s Shell vis­it to the Mus­car Op­er­a­tional Com­plex in Mon­a­gas has been in­cor­rect­ly po­si­tioned as ev­i­dence that Venezuela can con­sid­er this fa­cil­i­ty as a sub­sti­tute for At­lantic LNG.

Mus­car is a PDVSA-op­er­at­ed gas com­plex that dis­trib­utes gas for rein­jec­tion in­to oil­fields and for do­mes­tic sup­ply. It was al­so tem­porar­i­ly shut af­ter a 2024 ex­plo­sion and fire. This fa­cil­i­ty is around 350 km from the Lo­ran field and while Mus­car may be im­por­tant to Venezuela’s in­ter­nal oil and gas sys­tem. It is not, on the pub­lic ev­i­dence, an LNG ex­port ter­mi­nal ca­pa­ble of re­plac­ing Trinidad’s liq­ue­fac­tion plat­form.

At­lantic LNG re­mains the strate­gic prize be­cause it al­ready ex­ists. It has liq­ue­fac­tion trains, tanks, ex­port his­to­ry, share­hold­ers, com­mer­cial re­la­tion­ships and spare ca­pac­i­ty cre­at­ed by T&T’s gas short­age.

Re­ports in April 2026 in­di­cate that Shell ex­pects Venezue­lan gas to be processed in­to LNG in Trinidad, that Shell holds 45 per cent of At­lantic LNG, BP 45 per cent and NGC 10 per cent, and that the com­plex has ca­pac­i­ty be­cause of in­suf­fi­cient gas from the T&T side.

This is not a the­o­ry of Trinidad be­ing by­passed. It is the op­po­site. The com­mer­cial pat­tern is con­sis­tent: use Trinidad’s ex­ist­ing in­fra­struc­ture to mon­e­tise Venezue­lan gas faster than Venezuela could by build­ing or re­fur­bish­ing a full al­ter­na­tive ex­port chain. Go back to the Drag­on project to un­der­stand why. One op­tion in­volved rout­ing gas through Güiria, al­low­ing Venezuela to process gas on­shore and po­ten­tial­ly re­tain some for do­mes­tic use. But that op­tion could have ex­tend­ed first out­put to five years rather than three and sig­nif­i­cant­ly in­crease cap­i­tal ex­pen­di­ture and low­er re­turn on in­vest­ment.

The Trinidad route re­mains the most com­mer­cial­ly cred­i­ble path and the re­spon­si­ble thing is to ex­plain this point along­side any par­ti­san the­atre.

Ian Nar­ine is a fi­nan­cial con­sul­tant who un­der­stands that there are many dif­fer­ent types of gas. Please send your com­ments to ian@ian­nar­ine.com