Trinidad cancels gas deal over US sanctions on Venezuela

Caribbean nation cancels agreement with Venezuela to jointly develop natural gas field due to US sanctions on PDVSA.

The United States Department of the Treasury slapped sanctions on Venezuela's Petroleos de Venezuela SA last year in a bid to oust socialist President Nicolas Maduro [File: Ivan Alvarado/Reuters]

Trinidad and Tobago has cancelled an agreement with Venezuela for the joint development of a natural gas field straddling their maritime border because of United States sanctions on Venezuela’s state energy giant Petroleos de Venezuela SA (PDVSA).

The Caribbean island nation is a major exporter of liquefied natural gas (LNG), but its own offshore natural gas output has been declining in recent years.

That has raised the possibility of using gas from neighbouring Venezuela, which has large untapped offshore gas reserves, to feed LNG plants in Trinidad.

Trinidad and Tobago’s Prime Minister Keith Rowley said on Monday during an energy conference in Port of Spain that the two countries will now independently develop the 283-billion-cubic-metre (10.04-trillion-cubic-foot) Loran-Manatee shallow-water natural gas field.

“Progress in the development of the unitised Loran-Manatee field has been impeded by the sanctions imposed by the US government, which inhibits US companies from doing business with Venezuelan oil company PDVSA,” Rowley said.

Under the agreement signed in 2013 between the two countries, 73.75 percent of the joint field belongs to Venezuela and the rest to Trinidad and Tobago.

US oil major Chevron Corp holds a 60 percent interest in the Loran field, with the remainder held by PDVSA, while Shell Trinidad and Tobago Ltd holds a 100 percent interest in the Manatee field.

PDVSA, the Venezuelan oil ministry, Chevron and Shell did not immediately respond to a Reuters News Agency request for comment.

The US Department of the Treasury slapped sanctions on PDVSA last year in a bid to oust Venezuela’s socialist President Nicolas Maduro. He has overseen an economic collapse and is accused by the US and others of corruption and human rights violations.

PDVSA’s output has declined, but exports have increased in recent months and Maduro remains in power.

Rowley said gas production from the Manatee field could start by 2024 or 2025 at rates ranging from 7 to 11 million cubic metres (270 to 400 million standard cubic feet) per day.

He said the decision to independently develop the fields also has implications for the development of other cross-border fields that straddle the two countries: the Mankin-Cocuina and the Kapok-Doradoh.

These are estimated to hold 24 billion cubic metres (850 billion cubic feet) of gas within the Trinidad and Tobago maritime area.

Source: Reuters