Prime Minister Dr Keith Rowley said yesterday that Thursday night's signing of the licence allowing Shell and majority State-owned National Gas Company of Trinidad and Tobago (NGC) to develop and produce natural gas from Venezuela's Dragon field will contribute to T&T seeing a brighter future and to citizens continuing to enjoy the quality of life to which they have become accustomed.
"We've made some substantial progress, but there's a lot more to be done, and the future, while it's not a boom, but it's a brighter future as of today," the Prime Minister said at a media conference at the Diplomatic Centre in St Ann's yesterday.
Dr Rowley described the agreement on the licence as being "an historic development" and "extremely important" for the country's future.
Asked what the Dragon gas licence means for the people of T&T, Rowley said, "It means we can plan a future based on prospective revenues that would not have been on the horizon if we did not have access to these raw materials. I want the people of Trinidad and Tobago to see natural gas coming from Venezuela as a raw material..."
The Prime Minister pointed out that at its peak, T&T used 4.2 billion cubic feet (bcf) per day of natural gas in the production of petrochemicals and in the liquefaction of natural gas. That means T&T has the capacity to utilise 4.2 bcf of natural gas, but because of the maturity of the existing natural gas fields, the current usage of natural gas has fallen to about 2.6 bcf.
Dr Rowley said it was necessary for T&T to access new sources of natural gas to replace depleting reserves.
"We need our earning capacity strengthened and secured and we looked to a neighbour who had raw materials and we entered into what is in effect a brilliant commercial relationship," the PM said.
He added, "So, if we find additional gas to maintain that level, that is a good thing. Remember that if you don't find new natural gas sources as you consume the existing resources, the level of gas output will keep falling. And if we find substantial amounts of additional gas both at home and abroad, we not only will be able to maintain that level, but the prospect of raising the level of consumption would be our target.
"Anything that takes us up beyond 2.6 bcf to 3 bcf or 4 bcf is going in the right direction. The only way we can do that is to find additional sources of natural gas."
Dragon details
The Dragon gas licence will be for 30 years, and regarding the output of the field, Energy Minister Stuart Young said, "We are aiming to start and build up to 350 million standard cubic feet (scf) per day. But, as I say, when we get to the engineering design, we are going to be looking at additional capacity there and trying to see what could come in the future. It could go up to 450 million sfc a day, but the figure we have in mind is 350 million scf."
Rowley added that Venezuela has large reserves of natural gas in the country's east, which are nowhere near to a market.
"The fact that the Dragon is going to be coming to market raises a positive come hither plan to all those who have gas in eastern Venezuela. So, this is not just about Dragon. It is about Trinidad and Tobago being a hub for marketing the gas in this general region because we have what it takes to market that gas," the Prime Minister said, referring to preliminary agreements that T&T has entered into with Suriname and Barbados to exploit the natural gas resources in those countries.
Young also spoke about a competition within Shell to see if the Dragon or Manatee fields will be the first to bring gas to market.
"What that gas could mean when you run the figures is close to 1 billion cubic feet (bcf) per day of additional coming from those two fields as a start," said Young.
Young also revealed that Venezuela's state-owned energy company, PDVSA, is not a party to the licence "because we are now the licence holder," explaining that the Ministry of Energy in the South American country will represent Venezuela's interests in the licence.
He said Shell plans to survey the Dragon field in April 2024 and will take the final investment decision after that process is completed.
Asked when he expected first gas from Dragon to come ashore in Trinidad, Yound said, "We are putting all the pressure we can (to get them to) bring it in two years."
Young said Shell and the National Gas Company of Trinidad and Tobago (NGC) will jointly own the pipeline taking the gas from the Dragon field, through the Hibiscus platform located north east of Trinidad to the NGC hub at the Point Lisas Industrial Estate and the Atlantic LNG facility in Point Fortin. The Hibiscus platform is co-owned by NGC and Shell.
Young said NGC will not be the majority shareholder of the pipeline from the Dragon field.
Rowley said the balance between risk and reward was one of the reasons NGC, which is 100 per cent owned by Corporation Sole, the entity that holds assets on behalf of the State, would not be the majority shareholder of the pipeline.
"One, if you are going to be the majority shareholder, you are going to have to put out the majority investment and take the majority risk. Because of the importance of this venture to the people of Trinidad and Tobago, we always have to limit our risk exposure," he said.
He said sometimes, the Government can overdo it by being risk averse, explaining that that is why the State did not end up with shares in Atlantic LNG Trains 2 and 3.
"But I can tell you we will take as much shareholding as is available to us, as we believe is a reasonable risk for the people of Trinidad and Tobago. The Government of Trinidad and Tobago does not go out there drilling wells and saying that we will earn all of these millions and billions of dollars because we also know that if the hole is dry, we would lose millions and billions," Rowley said.
Young added that the Dragon pipeline is not the only deal and transaction NGC is looking at and working towards.
"So in the whole balancing act, we need to have capacity and capital to go into other areas that will come to fruition," said Young.
The Prime Minister also praised T&T's Minister of Foreign and Caricom Affairs, Dr Amery Browne, for preserving Caricom and T&T.
"I want to take the opportunity here to thank my Caricom colleagues, a couple of whom need to be identified by name for speaking up for Trinidad and Tobago when we fought this fight in Washington DC to get the OFAC licence. I speak here specifically of Guyana's President Irfaan Ali, Barbados Prime Minister Mia Mottley and Antigua and Barbuda's Prime Minister Gaston Browne. These are people who spoke loudly in support of Trinidad and Tobago's position as we fought this fight to escape the strictures of the American sanctions."