Shell and Trinidad's NGC have agreed on Aphrodite supply terms, clearing the way for the project
Shell, a British energy company, and Trinidad and Tobago’s National Gas Company (NGC) have reached an agreement on terms for natural gas supply from Shell’s Aphrodite Field, ending the pricing dispute that had delayed this project. NGC Chairman Gerald Ramdeen said Wednesday.
Ramdeen stated that the?agreement paves the way for the?development of offshore field. The?first?production is expected to begin in the second quarter 2027.
Shell stated in an email that it continues to work with NGC to boost gas supplies in Trinidad and Tobago.
The company stated that it was unable to provide any further information as the details were commercially confidential.
Shell and NGC have been in negotiations for months over the price of gas produced by the offshore development.
Shell announced last month that it had sold its jack up drilling rig, which was originally intended to be used for the Aphrodite Well, because the parties could not reach a commercial agreement.
Ramdeen stated that the revised agreement significantly improved NGC's economics compared to terms that were under discussion before Shell approved this project.
He said that the NGC benefited 400% from the terms reached in these negotiations.
NGC purchases gas from producers, and then supplies it to downstream customers. These include Trinidad's petrochemical sector and Atlantic LNG, which is the country's largest liquefied gas export facility. Shell owns 45% of Atlantic LNG.
Aphrodite is expected to give Trinidad a modest increase in its gas supply. The Caribbean nation's energy industry has been struggling with declining production for years, which has led to a reduction of LNG exports.
ADDITIONAL SUPPLIES
Ramdeen also revealed that NGC had signed an agreement with EOG to buy the company's portion of the gas produced by the Coconut Project offshore Trinidad. This joint venture between BP and NGC was launched in 2009.
He said that instead of supplying Atlantic LNG to Trinidad, the entire?gas from EOG's shares will be directed towards Trinidad's petrochemical industry.
Ramdeen stated that the completion of this agreement will add 300 Bcf to NGC's supply.
EOG didn't immediately respond to a comment request.
Industry participants say that commercial challenges, such as gas price?issues have contributed to the closure of multiple petrochemical plants on the island over the past few years.
Trinidad also seeks to boost gas supplies by importing gas from Venezuela. Shell and BP are pursuing cross border gas developments which would 'allow Venezuelan gas be produced and transported... to Trinidad for processing and export.
The Venezuelan government has approved the projects. They are seen as crucial to Trinidad's energy industry and to replenishing the feedgas supply to Atlantic LNG over the next decade.
(source: Reuters)
