Prime Minister Dr Keith Rowley walks past the Guard of Honour on his arrival in Caracas, Venezuela, yesterday. Photo: T&T Guardian

This will make T&T more attractive to billion-dollar downstream investments in the energy sector.

T&T has experienced gas shortages in the last five years and there has not been a single new investment in the petrochemical sector since.

In what must be considered one of his most significant achievements since coming to office almost three years ago, the Prime Minister beamed with pride as he told reporters that not only would the gas be coming here to support this country’s development but that the cost was less than the National Gas Company (NGC) was paying many of the upstream producers.

“We may have been able to save our industry by getting a secure source of gas for the downstream sector. It may over time also allow us to look at the expansion of the downstream sector and investments there, as long as we can show investors we have a secured stream of gas,” Rowley told journalists on the flight back from the Bolivarian Republic.

Rowley also revealed that the NGC has been able to negotiate a tranche of gas for power generation at an even lower price than the rest of the gas to be used by the petrochemical sector.

The dream of the processing of Venezuelan gas in T&T and its sale to major international markets was one that was articulated by the late prime minister Patrick Manning, and while there have been negotiations on various cross-border blocks to achieve the same objective nothing has been achieved in more than 15 years.

Today’s signing in the Venezuelan capital brings this dream one step closer to reality.

The Prime Minister was not willing to disclose the price of the gas, pointing to commercial confidentiality, but he revealed it will be 150 million standard cubic feet per day (mmscf/d), with the possibility of it increasing to 300 mmscf/d.

Rowley said the pipeline carrying the gas from Venezuela’s Dragon Gas field in Eastern Venezuela to Shell’s Hibiscus platform off the North Coast will be built and owned in a joint venture between the NGC and Shell Trinidad.

The estimated cost of the construction of the pipeline is over $1 billion TT.

To put the deal into perspective, Trinidad would access enough gas to support at least two methanol plants from Venezuela, it will help with the shortfall in natural gas to the Point Lisas Industrial Estate, and would provide a guaranteed source of cash to the Venezuela government.

As President Nicolas Maduro puts it, the deal will lead to money to build schools and provide drugs to Venezuela’s hospitals.

The drive from the Simon Bolivar Airport to Mira Flores demonstrated how much the cash is needed as long lines could be seen everywhere in the capital as people struggle to deal with the worst economic crisis in the Americas.

Both Rowley and Maduro acknowledged that the signing of terms of the agreement had come a year and a half after they signed a Memorandum of Understanding for the very project, but both said it was better late than never.

The two neighbours are also involved in negotiations to develop gas in the Loran/Manatee fields that straddle both countries’ maritime borders.

The Loran-Manatee field has an estimated 10.25 trillion cubic feet of gas of which roughly 74 per cent belongs to Venezuela with 26 per cent belonging to T&T.

Cheap natural gas for T&T