Shell aims to begin natural gas production at Venezuela’s Dragon field by 2026, a year ahead of the original schedule.
The company also plans to begin exporting natural gas to Trinidad and Tobago in 2026.
Go deeper with GlobalData
The project underscores industry hopes for continued exceptions from US sanctions on Venezuela, despite recent stricter enforcement.
Shell and partners plan to start survey work next month, drilling three wells, reported Reuters, citing sources.
The US sanctions target nearly the entire Venezuelan oil and gas industry, controlled by state company PDVSA.
Countries like Trinidad and Tobago and private operators need US authorisation to export or pay revenue to sanctioned entities including the government, the central bank and PDVSA.
The US granted an authorisation licence for Dragon in early 2023, with the approval now valid until October 2025.
Trinidad’s National Gas Company confirmed that the licence remains in effect.
“NGC and Shell continue to work assiduously on the Dragon project and remain committed to achieving first gas as soon as is reasonably possible,” the company stated.
Trinidad’s government recently revealed plans to inform Washington about the critical role that US gas project licences play in Venezuela in supporting regional energy security, the report said.
Shell is accelerating the timeline for first production in order to secure gas supplies for the Atlantic LNG project in Trinidad.
According to preliminary data from LSEG, Atlantic LNG produced 8.5 million tonnes (mt) last year, missing its full capacity by 4mt because of a gas shortage.
Earlier this month, bp, the project’s major shareholder, revealed it would shut down the first liquefaction train, which has been inactive since 2020 due to insufficient gas.
Dragon has an estimated four trillion cubic feet of gas reserves and is near a Trinidad field with a pipeline to the Atlantic LNG facility.
Shell is set to begin an environmental baseline survey in April, focusing on waves, sea currents, earth movement and marine life.
This survey is a key part of the engineering work to construct a pipeline approximately 16km long, linking Dragon to Trinidad.
Venezuela granted a 30-year licence to Shell and NGC in 2023 to explore and produce the gas field.
A final investment decision by Shell is expected this year, pending Washington’s decision on the US licence extension.
Washington recently terminated a key licence enabling Chevron to operate in Venezuela.
However, no cancellations of licences related to energy projects between Venezuela and Trinidad have been announced.
