Argus Media Limited

11/23/2021 | News release | Distributed by Public on 11/23/2021 15:52

Trinidad to sweeten terms for gas drilling

Trinidad and Tobago is reforming its hydrocarbons fiscal regime to encourage natural gas investment to align with terms governing the Shell-operated Manatee field, energy minister Stuart Young said today.

Shrugging off pressure to wean away from hydrocarbons, the government is about to announce a licensing round for gas-prone deepwater blocks as "gas is the future and is here to stay," Young said.

"The intention is to change production-sharing contract terms to keep Trinidad and Tobago as a competitive gas province," Young told a conference, without indicating the timing of the new fiscal terms and deepwater round.

The government and Shell last week signed a production-sharing contract for Manatee, which is part of the 10 Tcf Loran-Manatee deposit that straddles the maritime border with Venezuela.

Manatee holds an estimated 2.7 Tcf of gas, and first output is anticipated in 2025 at 350mn cf/d, rising to a peak of 700mn cf/d, Trinidad's prime minister Keith Rowley said.

"Manatee is an absolutely strategic project as one of the largest gas discoveries in the country" and it will be "critical in supplying the future of the energy industry for both domestic and the LNG markets," Shell's Trinidad country chair Eugene Okpere said on signing the contract for the block.

"Shell is in the forefront of trying to accelerate the energy transition. Gas is absolutely part of that equation," he said.

The government is counting on Manatee to replenish gas supply. Curtailments have dogged LNG, petrochemical and fertilizer plants for years. Shell and UK major BP are the main shareholders in Trinidad's Atlantic liquefaction complex.

Previous efforts by Trinidad and Venezuela to jointly develop the cross-border deposit - with Shell's help - ran aground in 2018, in part because of disagreement over the gas price. The following year, the US imposed oil sanctions on Venezuela, sinking the joint initiative altogether.

By Canute James