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posted 5 Dec 2016, 20:59 by Gerry Kangalee   [ updated 5 Dec 2016, 21:04 ]
ON 2016-12-06, the National Workers Union (NWU) issued the following statement

After all the dancing and the prancing in Caracas, we still know precious little about the gas agreement which was signed by Prime Minister Rowley and President Maduro on Monday. What do we know?

At the post-Cabinet news conference on Thursday, Rowley said that he was going to  “to sign the government to government agreement and the commercial structure which will open the door for commercial exploitation of the Dragon gas field in Venezuela which is to the north of us here, just beyond the Bocas.”

Well, there seems to be two documents that were signed: “the government to government agreement” and the “commercial structure.” The government to government agreement, probably, clears the way for the signing of what Rowley refers to as the “commercial structure.” We are not aware of who signed this latter document and what the contractual obligations of the signature parties are.

The Prime Minister informed us that Shell would be at the signing ceremony so it is

reasonable to assume that Shell would have been one of the parties to have signed the “commercial structure.” This assumption is strengthened by the knowledge that Shell, since its buy out of British Gas, is the largest shareholder in Atlantic LNG, whose business it is to compress and liquefy the natural gas for export.  

This operation hardly adds any locally-accruing value and is no different to when Caribbean slave-driven sugar cane production was exported as molasses – the so-called muscovado bias -which relegated colonial economies to producing unprocessed commodities for export.

According to Rowley Shell is “partnering with Trinidad and Tobago in this exercise” in its capacity as the “owner of pipeline and platform in Trinidad and Tobago which can be considered for utilisation in the entry of/receipt of any gas from Venezuela”. 

If and when this natural gas does come to market it would be interesting to see how it is apportioned between Atlantic LNG and the Point Lisas petrochemical companies who are at this time in a fierce struggle for natural gas supplies and who are putting great pressure on the government from the upstream and downstream sides of the equation to support their respective interests. The two largest shareholders in Atlantic LNG BP and Shell are themselves the leading producers of natural gas.

Who is going to make the capital investment needed to bring the Dragon Field into production? Media reports state that the Venezuelan state-owned PDVSA reckons that four wells need to be drilled and that eventually an offshore platform has to be installed. Then there are pipelines to be run to hook up with Shell’s structures (if that is the intention).

What is the role of the National Gas Company (NGC) in this project? According to its website 

“NGC’s traditional business of compressing, purchasing, transporting and selling natural gas to industry provides over 75 per cent of its revenue stream. The gas aggregation and merchandizing roles have honed the Company’s expertise in natural gas services including, pipeline maintenance and construction and gas transmission and commercial activities.”

In effect what NGC does is purchase the gas from the upstream producers like Shell and BP, transport the gas by NGC-owned and operated pipelines to its subsidiary PPGPL which extracts the associated natural gas liquids like propane, butane and natural gasoline from the gas and through its pipeline network delivers cleaner residue gas to the downstream customers. Will NGC have any input in the development of the Dragon project except to receive gas from Shell (if that is the intention), and play its accustomed role as mid-stream distributor?

When will the project begin? How long will it take for first gas to be delivered? How much gas is expected to come from Dragon over what time period? How would the so-called gas curtailments affecting downstream producers be impacted? What kind of pricing arrangements have been worked out with the Venezuelans? What is the government’ take in the absence of revenue streams from royalties and production sharing contracts.

The National Workers Union calls upon the Rowley Administration to provide answers to the many questions raised so that the citizen of Trinidad and Tobago may have a clear idea as to whether the Dragon deal will benefit them and not just fatten the pockets of transnational corporations and become yet another instance of the people of Trinidad and Tobago providing corporate subsidies to transnational corporations.


Gerry Kangalee (National Education and Research Officer. Cell: 785-7637)