The U.S. Treasury Department has issued a crucial licence permitting Trinidad & Tobago, energy major Shell and their partners to negotiate the development of the Dragon gas field in Venezuelan waters, marking a long-awaited breakthrough after years of stalled progress due to sanctions and political uncertainty. The licence, issued under the Office of Foreign Assets Control, allows formal discussions with Venezuela’s state oil company Petróleos de Venezuela (PDVSA) through April 2026.
The Dragon field, located near the maritime border between Trinidad and Venezuela, is estimated to contain over four trillion cubic feet of natural gas. The development is planned to tie back via a 17-kilometer subsea pipeline to Trinidad’s existing facilities, with first-phase production expected to reach around 185 million cubic feet per day. With Shell as operator, the project addresses Trinidad’s downstream gas-shortage challenge while navigating complex regulatory constraints, positioning the field as a potential game-changer for both national and regional energy supply.
Trinidad & Tobago has long been the Caribbean’s dominant gas producer and exporter, with its LNG and petrochemical industries forming the backbone of the economy. However, domestic gas output has declined in recent years, straining feedstock supply for the flagship Atlantic LNG plant and downstream industries. Access to Venezuelan gas from the Dragon field could provide the feedstock stability the country urgently needs, allowing it to restore LNG production and preserve its position as a key supplier to global and regional markets.
Looking ahead, Trinidad and its partners must translate this diplomatic breakthrough into commercial progress. Negotiations with PDVSA will need to clarify pricing structures, gas volumes and delivery timelines, all while satisfying U.S. regulatory conditions. The construction of new infrastructure linking the Dragon field to Trinidad’s systems will be another major milestone, as will the challenge of aligning technical, legal and political interests across borders. For the wider Caribbean, which remains largely dependent on imported fuels and vulnerable to global price volatility, the revival of the Dragon project offers a potential anchor for deeper regional energy cooperation.
Source: energycapitalpower.com