(Trinidad Express) Prime Minister Dr Keith Rowley said the recent agreement by the United States to allow Trinidad and Tobago to purchase natural gas from Venezuela, despite US sanctions against the South American country remaining intact, was a triumph for T&T.
He noted that it was only made possible through the efforts of a number of lobbyists in the US along with representations from a number of persons the country had forged relationships with.
“The United States has now agreed that we can do straight-up commercial arrangements with Venezuela, in that we get our gas and we pay for it as per the terms of our term sheet,” Rowley said during a post-Cabinet press conference on Thursday.
Prior to this development, Venezuela was prevented from receiving payments in any form for gas sold to Trinidad and Tobago.
Rowley said in light of this new development, Energy Minister Stuart Young will proceed to Venezuela to finalise the conditions on the term sheet, while Trinidad and Tobago’s partner Shell will be moving full speed ahead with the technical side of the deal.
“Very soon, we expect to close off that negotiation and the last thing to happen is for the licence to operate. When all parties are satisfied with the conditions, then the licence will be issued. We have the commitment from President (Nicolas) Maduro that the licence would be issued, so we just have to see when that happens and we work towards that point.”
He said the deal with Venezuela is a long-term arrangement and not a today for tomorrow transaction.
“If we in Trinidad and Tobago do not discover major fields to replace what we are consuming on a daily basis, and if we don’t get access where the gas exists, we are going to be forced to accept a significant reduction in our fortunes.”
He noted that the country’s best earning period in the hydrocarbon was in 2007 to 2009, leading to the establishment of the Heritage and Stabilisation Fund.
“At that time many people thought that the good times will roll like permanently, refusing to understand that we are enjoying the quality of life that we enjoy now because we are consuming a wasting resource.
“At that time, we were consuming on a daily basis approximately 4.2 billion cubic feet of gas. That volume was large, but we were in the low end of the earning part of the market,” Rowley said.
He noted that the country is now down to about 2.6 billion cubic feet daily, but fortunately they were successful in renegotiating the country’s take, so while the volumes are low, the earnings have not dropped significantly because the earning mechanism was changed.
The PM said coming out of significant discussions with Shell and BP, they were able have the referencing done not only on the low point of Henry Hub pricing, but a basket of prices comprising of the European price, Asian price and Henry Hub’s, leading to an average being arrived at.
Rowley said the country can also look forward to receiving gas from the Loran Manatee field in the future, where Trinidad and Tobago has a 27 per cent stake and Venezuela, 73 per cent.
He said following the failure to move forward with a unitization approach with Venezuela with regards to the Loran Manatee field, Venezuela has now agreed for Trinidad and Tobago to proceed alone in extracting gas from its 27 per cent share in the field. “That is proceeding apace and we expect that the day will come when we will extract gas.”
He said another available option is for this country to do business on the Loran side of the field (73 per cent portion owned by Venezuela), which was a suggestion put forward by Maduro himself.
“So, if we get on to the point where we’re extracting gas from Venezuela to feed the plants in Trinidad and Tobago, that would have been the most successful thing we would have done after discovering gas within our own borders. And, the future that we will not give up with respect to the climate change and the need to get out of the hydrocarbon industry, Trinidad and Tobago’s position is that as long as there is a hydrocarbon business in the world and we have hydrocarbons, we will extract it and we will market it.
“We will also take steps, as we’re taking, to reduce our carbon footprints by investing in some sustainable energy as we’re doing now,” Rowley said.
