Is the Dragon Gas Deal Stillborn?

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By Neil Gosine

THE  Dragon gas field proposed deal with Venezuela came with great expectations and hope, with the announcement of the deal where we heard that Trinidad and Tobago has received the US Government’s agreement through a OFAC waiver to develop the field back in January 2023.

Since then, however, everything has gone quiet and we are not hearing any progress on this supposedly important and lucrative deal.

T&T believed that they can access up to 350 million cubic feet of gas per day from the Dragon field if operationalised. There was excitement over this development as it can mean much-needed life support for our energy sector.

T&T is Latin America’s largest liquefied natural gas (LNG) exporter and can process a capacity of 4.2 billion cubic feet per day (bcfd) into LNG, petrochemicals and power.

Its gas production is just under three bcfd now though. However, there has not been any further encouraging news by our government or the Venezuelan government on this deal for over five months now. Why? For such a great prospect wouldn’t our government make a big announcement and have a big press conference over this deal if there was anything positive to report? This makes me feel, that to date, the negotiations with Venezuela have stalled and are not going very well.

The same questions initially raised and have not been answered to date are still burning questions that need to be answered. For instance, how exactly would T&T be paying Venezuela for this gas?

We obviously can not be paying with toilet paper, onions and garlic? Time is running out on the two-year waiver given by the United States government and we haven’t reached anywhere with this deal to date.

We have not heard who will be financing this project and how. The entity willing to provide finance would, of course, have to look at if the two years waiver is actually possible to get this project started, realise returns on their investment and further assess its ability to see whether gains on their investment are enough should they finance this project.

What this really means is that it does not look feasible at the current time. It doesn’t look like T&T will ever get this off the ground.

Under the constraints of the two-year waiver with time running out, it really looks grim. The experts have said that we needed a minimum of at least three years to see any gas from this field and what exactly will be the payback period for investors.

We haven’t heard a peep from the minister of energy lately on this. Investors will normally take advantage of better-termed investments than this one under the current conditions. So this project seems like it’s going nowhere for now.

That’s why it’s so important to have proper people at the helm to drive these projects and get them off the ground.

Currently, we don’t have this under this government. The government has not moved swiftly enough to ensure a contract is in place with Venezuela on this Dragon gas and has failed to date to make it operational.

Given how difficult it is to deal with Venezuela and the complications with their political stability, we would have expected to hear something from the President of Venezuela by now too. However, we are not hearing anything positive and while this country really needs to get this gas, it all depends on T&T’s ability to access the natural gas from the Dragon field. Everyone was so excited to hear this announcement back in January 2023 and knew it can mean a major boost to our economic prospects that we so desperately need.

The sanctions against the Venezuela oil company PDVSA have remained and there are obviously many hurdles that have not been overcome to date and the difficulties of dealing with Venezuela still remain a major obstacle. So we all losing hope that the Government can pull this off. There are many many issues that were not addressed by the Dr Keith Rowley-led government and the public is in the dark over this issue.

We can no longer wait to see how this works out and live in the hope that it is not stillborn because we really need this. Questions must be answered and the T &T energy sector needs life support Now!

Dr Neil Gosine is an insurance executive and president of the Valsayn North Park Association. He is also the treasurer of the UNC and a former chairman of the National Petroleum Marketing Company of Trinidad and Tobago. He holds a Doctorate in Business Administration, a Master’s in Business Administration MBA, BSC in Mathematics and a BA in Administrative Studies. The views and comments expressed in this column are not necessarily those of AZP News, a Division of Complete Image Limited.


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