PdV seeks to divert gas to Trinidad LNG plant

OREANDA-NEWS. September 24, 2015. Venezuela state-owned PdV is promoting the diversion of some of its offshore gas to Trinidad and Tobago?s liquefaction plant, an idea that it had previously resisted in favor of developing its own gas processing facilities.

Spain?s Repsol and Italy?s Eni started Venezuela first offshore gas production in July from the 16.3 trillion ft3 Perla field in the Cardon 4 block in the Gulf of Venezuela. Initial production of 150mn ft/d (4.2mn m3/d) is scheduled to ramp up to 1.2bn ft3/d in 2020. PdV is the offtaker.

In the context of gas cooperation talks in Port of Spain this week, PdV chief executive Eulogio del Pino said "20pc of this gas could be sent to Trinidad and Tobago and liquefied to expand the international market."

It is unclear how the Perla gas would reach Trinidad. Current flows are transported through a new pipeline to the Venezuelan coast.

Trinidad and Venezuela restarted negotiations yesterday on exploiting gas deposits that straddle their maritime border.

"The intention of these discussions is to reactivate the process of monetizing the gas deposits to the benefit of both countries," a spokesman for Trinidad and Tobago's energy minister told Argus today.

The talks focus on three cross-border fields that hold an estimated total of 11.5 trillion ft3 of reserves, mostly in the 10.25 trillion ft3 Loran-Manatee field. Talks started in 2007 but had sputtered around the naming of operators and the location for processing the gas.

Cash-strapped PdV is now showing newfound enthusiasm for a deal. "We are promoting an agreement as soon as possible between the operators," Del Pino said. "On the Venezuelan side PDVSA and on the Trinidadian side the transnational companies that are going to operate these gigantic offshore developments together with the Venezuelan state-owned company."

Venezuela and Trinidad signed a draft agreement in September 2013 allocating 73.75pc of Loran-Manatee reserves to Venezuela and the other 26.25pc to Trinidad. The field is part of Block 6d on the Trinidad side of the maritime border and Block 2 on the Venezuelan side.

Chevron holds a 60pc operating stake in Block 2, in addition to 100pc of Block 3 in Venezuela?s offshore Plataforma Deltana region. It also holds 50pc of the Manatee area of Block 6d in Trinidad. "The Loran Field in Block 2 and the Manatee Field in Trinidad and Tobago Block 6d form a single, cross-border field that lies along the maritime border of Venezuela and Trinidad and Tobago. In 2013, cross-border agreements were signed between the governments of Trinidad and Tobago and Venezuela unitizing Loran-Manatee. Work continues in 2015 on maturing commercial development concepts," Chevron says.

In the 2013 agreement, Venezuela was allocated 64pc of the second-largest field, Manakin-Coquina, which has 0.74 trillion ft3 of reserves, while Trinidad and Tobago was allocated 84pc of Dorado-Kapok that holds an estimated 0.31 trillion ft3.

The gas from both sides of the field is likely to be liquefied for export at Trinidad?s underutilized Atlantic LNG complex. The 14.8mn t/yr facility is among several industrial sectors in Trinidad that have been affected by gas supply curtailments over the past two years.

Although Venezuela has begun to install gas processing facilities to handle Perla gas, it has no gas installations near Loran-Manatee.

Trinidad and Tobago produced 17.38mn m of LNG between January and July, down by 6.2pc from the same period in 2014. Gas production averaged 3.859bn ft3/d for the seven-month period, 6.1pc lower than a year earlier.