Sept 23 (Reuters) – British energy major Shell and Trinidad and Tobago’s National Gas Company have agreed terms for natural gas supplies from Shell’s Aphrodite field, ending a pricing dispute that had delayed the project, NGC Chairman Gerald Ramdeen told Reuters on Wednesday.
The agreement clears the way for development of the offshore field, with its first production expected in the second quarter of 2027, Ramdeen said.
Shell said in an emailed statement that it continues to work closely with NGC, to bolster gas supplies in Trinidad and Tobago.
“We are unable to comment further as these details are commercially confidential,” the company said.
The agreement follows months of negotiations between Shell and NGC over the price of gas from the offshore development.
Last month, Shell told Reuters it had let go its jack-up drilling rig which was originally to be used to drill the Aphrodite well, after the parties failed to reach commercial terms.
Ramdeen said the revised agreement significantly improved the economics for NGC compared with terms that had been under discussion before Shell approved the project.
“The concluded terms of these negotiations brought 400% more value to the NGC,” he said.
NGC buys gas from producers and supplies it to downstream customers, including Trinidad’s petrochemical sector and Atlantic LNG, the country’s flagship liquefied natural gas export facility, in which Shell holds a 45% stake.
The Aphrodite development is expected to provide a modest boost to Trinidad’s gas supply as the Caribbean nation’s energy sector grapples with years of declining production that have reduced LNG exports and forced the closure of several petrochemical plants.
ADDITIONAL SUPPLIES
In a separate development, Ramdeen said NGC has signed an agreement with EOG Resources to purchase the company’s share of gas from the Coconut project offshore Trinidad, a joint venture with BP.
Rather than supplying Atlantic LNG, all of the gas from EOG’s share will be directed to Trinidad’s petrochemical sector, he said.
“The completion of this agreement will add 300 Bcf of gas to NGC supply,” Ramdeen said.
EOG did not immediately reply to a request for comment.
Commercial challenges, including gas pricing issues, have contributed to the shutdown of multiple petrochemical facilities on the island in recent years, industry participants have said.
Trinidad is also seeking to bolster gas supplies through imports of gas from neighboring Venezuela. Shell and BP are pursuing cross-border gas developments that would allow Venezuelan gas to be produced and transported to Trinidad for processing and export.
The projects, which have received approvals from the Venezuelan government, are viewed as critical to replenishing feedgas supplies to Atlantic LNG and supporting Trinidad’s energy sector over the coming decade.
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