Uncertainty over T&T-Venezuela gas deal following sanctions

Minister in the Office of the Prime Minister Stuart Young has said that the government does not know as yet if the US sanctions on Venezuela's state-owned oil company PDVSA would affected the gas deal between Venezuela and Trinidad and Tobago.

"We are seeking advice to determine how they may affect the deal," Young said in response to a question by Opposition Leader in the Senate, Wade Mark.

He said it was premature at this time to say what, if any, effects it may have.

The US announced on Monday that it was implementing sanctions against PDVSA, which will involve all revenue earned from the sale of oil and gas in the US, being placed into a blocked account inaccessible to the current Maduro-led regime.

The US has recognised the head of the National Assembly, Juan Guaido, as the interim president of Venezuela.

In November 2018, op­po­si­tion law­mak­er and mem­ber of the Venezue­lan As­sem­bly, Car­los Valero warned Gov­ern­ment that any treaties or con­tracts signed be­tween the two coun­tries and which had not been passed by the Na­tion­al As­sem­bly in Venezuela might not be ho­n­oured in the fu­ture.

Valero had claimed the Na­tion­al As­sem­bly was the on­ly le­git­i­mate body in Venezuela with the au­thor­i­ty to en­sure that agree­ments were le­gal and would be ho­n­oured mov­ing for­ward.

Valero urged lo­cal law-mak­ers not to be swayed or ma­nip­u­lat­ed by the promis­es of the cur­rent Venezue­lan ad­min­is­tra­tion.

On Au­gust 27, 2018 the Prime Min­is­ter and Venezue­lan Pres­i­dent Nicolás Maduro signed an agree­ment in Cara­cas that will al­low the is­land to ac­cess gas from the off­shore Drag­on field.

Row­ley had told the me­dia then, “We may have been able to save our in­dus­try by get­ting a se­cure source of gas for the down­stream sec­tor. It may over time al­so al­low us to look at the ex­pan­sion of the down­stream sec­tor and in­vest­ments there, as long as we can show in­vestors we have a se­cured stream of gas.”

The Prime Min­is­ter was not will­ing to dis­close the price of the gas, point­ing to com­mer­cial con­fi­den­tial­i­ty, but he re­vealed it will be 150 mil­li­on stan­dard cu­bic feet per day (mm­scf/d), with the pos­si­bil­i­ty of it in­creas­ing to 300 mm­scf/d.

The pipeline car­ry­ing the gas from Venezuela’s Drag­on Gas field in East­ern Venezuela to Shell’s Hi­bis­cus plat­form off the North Coast will be built and owned in a joint ven­ture be­tween the NGC and Shell Trinidad.

The es­ti­mat­ed cost of the con­struc­tion of the pipeline is close to TT $1 bil­li­on.

T&T has been suf­fer­ing from gas cur­tail­ment for the last six years and it has led to a short­fall in the pro­duc­tion of all the com­mo­di­ties in­clud­ing LNG and Petro­chem­i­cals and as a con­se­quence sig­nif­i­cant loss of rev­enue to the trea­sure and for­eign ex­change. Trinidad and To­ba­go will re­ceive its first gas from Venezuela’s Drag­on Field in 2020, ac­cord­ing to Bo­li­var­i­an Re­pub­lic’s Min­is­ter of En­er­gy, Manuel Queve­do.


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