Wednesday, February 21, 2018

T&T, Venezuela gas collaboration in the works


Norman Christie

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Rafael Ramirez

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The good news is that further movement on the eventual development of cross-border gas reserves straddling the maritime border between Trinidad and Tobago and Venezuela southeast of Trinidad should result from the discussions scheduled to take place when the Joint Steering Committee (JSC) overseeing the exercise meets in Port of Spain on March 13-14.

The bad news is that the talks will focus on those pairs of blocks from which Venezuela gas is unlikely to be allowed to come to Trinidad for commercialisation 6d on the Trinidad side and block 2 in Venezuela and 5b in Trinidad and block 4 in Venezuela while the pair where Venezuela is likely to agree to such a move, Kapok in Trinidad waters and block 1 in Venezuela, will not be on the agenda at all.

My two or three readers will recall that when our Energy Minister, Kevin Christian Ramnarine, met his Venezuelan counterpart, Rafael Ramirez, in Caracas on December 3, 2011, the latter guardedly suggested that "Venezuela was prepared to enter into discussions on terms of a joint arrangement with respect to the gas in Kapok/block 1", meaning that there was a chance that the gas under the seabed in Venezuelan waters might conceivably be monetised in Trinidad.

On the other hand, Minister Ramirez was adamant that "Venezuela already had plans for monetising Venezuelan gas in Venezuela" in the case of 6d and block 2, where the eight trillion cubic feet (tcf) that straddles the border is divided up 6.2 tcf in the Loran discovery in block 2 (73 per cent) and 1.8 tcf in the Manatee discovery in block 6d (27 per cent).

Ramirez did not mention the Manakin/Coquina discoveries in blocks 5b and block 4 at all, presumably because the Reservoir Technical Working Group (RTWG) had not, at the time, completed its work. That work is now over and a "final report," according to the details of the March 13-14 meeting exclusively obtained by Energy Insider, "concerning the volumes of natural gas reserves and its percentage distribution between both countries will be reviewed by the JSC."

Norman Christie, regional president, Trinidad, for bpTT, the operator of block 5b, told me recently that Manakin/Coquina was estimated to contain "about 2 tcf of gas cross-border".

That's modest by comparison with Manatee/Loran and the RTWG's determination will reveal how much is believed to be on each side.

Venezuela may well be disposed to letting some of the gas in block 4 (held by Statoil/Total/PdVSA) come to Trinidad too but 5b/block 4 are the furthest away from the Trinidad mainland in an entirely greenfield region and its going to be costly to get it to shore, though it may be able to piggy-back on the infrastructure Chevron and BG T and T intend to build in 6d/block 2.

Activity in connection with that infrastructure has been quietly proceeding for some time, though you would not know it because Chevron, operator of both Manatee and Loran, is not known for treating the Trinidad and Tobago public with courtesy and letting us know what it is doing with our natural resources. I have tried to persuade Fred Eastwood (no relation to Clint), Chevron's Trinidad and Tobago country manager, to spill the beans on cross-border gas development as it relates to the two discoveries but to no avail.

I don't blame poor Eastwood: He is hamstrung by a Chevron policy of non-communication, as disrespectful as that may be to this country and as embarrassing as it probably is to its block 6d, partner BG T and T which enjoys a sterling reputation as a respectful communicator in my experience.

However, certain initiatives have been set in train by Chevron, including a high resolution, 2D geophysical and oceanographic survey, covering approximately 85 km, which was undertaken by local company, Capital Signal.

The survey covered both blocks 6d and 6b, which Chevron and BG also hold in common and where both the Dolphin and Dolphin Deep fields have been busily producing gas for many years now.

The prime purpose of the survey was to determine a route for the pipeline that will be carrying Chevron/BG T and T's share of the gas the 1.8 tcf mentioned above from a Central Processing Platform (CPP) that will be erected most likely in Venezuelan waters, to a new platform in 6b, Dolphin B, to be bridge-linked to the existing gas-producing Dolphin A platform.

According to Chevron's concept, three other platforms will be necessary to properly exploit Manatee/Loran gas for the benefit of both Trinidad and Tobago and Venezuela a drilling platform, a well head protector platform and a quarters platform.

If Venezuela is taking the 6.2 tcf to its own mainland for use in domestic gas-based projects (power generation, petrochemicals, et al), "measurement systems will be required to ensure that each side receives its allocation of gas, with separate metering on the Trinidad facilities to ensure the fiscal requirements for Trinidad and Tobago are met," according to Derek Hudson, president of BG T and T and a very accomplished communicator in his own right.

One of the items on the agenda for the March 13/14 talks, is "consideration of the provisional operation plan proposed by Chevron in February, 2011, in which the company undertook to implement the development plan (for Manatee/Loran), assuming 100 per cent of the investment until the commercial operation phase."

I presume that refers only to the infrastructure in block 2, where Chevron and PdVSA are currently holding 39 per cent and 61 per cent, respectively. PdVSA will come in for its share when the actual gas-producing stage is reached. In facilities located in Manatee in Trinidad and Tobago waters, BG T and T will obviously be required to pick up 50 per cent of the tab, concomitant with its share.

But all of this still leaves Kapok/block 1 up in the air, with no indication that Venezuela, despite Ramirez's accommodating posture last December, is prepared to formally sign over its small share for monetization in Trinidad (it will probably require the usual drawn-out bureaucratic process for which Venezuela is infamous).

As Christie points out: "The majority of the gas is on bpTT's side and some of it has been produced. Depending on what the final determination is, we would know exactly whether the gas we are producing is our or theirs. But there was an agreement that allowed us to produce, while reservoir size was being determined and how much would he put on our side of the border as a result of that."

In effect, therefore, Minister Ramnarine's "Gas Caribe", a joint effort by Trinidad and Tobago and Venezuela to export gas, may already be happening in a kind of informal way through Kapok but he should at least instruct the Trinidad and Tobago members of the PSC to bring up the matter at the meeting, with a view to having a more formal gas collaboration agreement somewhere down the line.

David Renwick was awarded the Hummingbird Medal (Gold)

in 2008 for the development

of energy journalism

in Trinidad and Tobago.