Shell Named Preferred Bidder for Shallow Water Block in Trinidad and Tobago

Strategic Victory for Shell

September 26, 2024: Shell has been named the preferred bidder for a highly sought-after shallow water block in Trinidad and Tobago, according to sources cited by Reuters. This decision comes as the Caribbean nation aims to reinvigorate its liquefied natural gas (LNG) and petrochemical sectors, which have been impacted by declining gas production.

Outperforming Industry Heavyweights

Shell outperformed industry heavyweights bp and EOG Resources in the bidding process for the coveted Modified U(c) block, which was the most desirable of the 13 blocks offered during the country’s shallow water auction last year. Official estimates suggest these blocks hold a combined 13.4 trillion cubic feet of natural gas.

Significance for Shell

This win is of particular significance for Shell, as the company is a key stakeholder in Trinidad’s Atlantic LNG project, which produces 15.3 million tonnes of LNG per year. Shell, alongside bp, is keen to secure additional gas supplies to support the project’s liquefaction trains.

Negotiations Underway

Negotiations between Shell and the Trinidad Government are still underway, with further details about the agreement expected soon. While neither Shell nor bp has commented publicly, the announcement marks a strategic victory for Shell, especially in light of its recent final investment decision on the Manatee gas field in Trinidad’s East Coast Marine Area.

Enhancing Gas Production Capacity

The Manatee field, part of the Loran-Manatee discovery which straddles the maritime border between Trinidad and Venezuela, will enhance Shell’s gas production capacity. The development will include a pipeline connecting the offshore installation to Trinidad’s onshore gas processing facility.

Competitors Yet to Respond

EOG Resources and bp, who submitted bids for other blocks in the auction, have yet to provide responses regarding their bids.

Conclusion

The announcement marks a significant milestone for Shell and its efforts to secure a strategic foothold in the Trinidad and Tobago energy market. As the company continues to navigate the complex energy landscape, this win will undoubtedly play a crucial role in its future growth and development.

FAQs

Q: What is the significance of Shell’s win in the shallow water block auction?
A: The win is significant for Shell as it will enhance the company’s gas production capacity and provide additional gas supplies to support its liquefaction trains.

Q: Who are the other companies that submitted bids for the shallow water blocks?
A: EOG Resources and bp submitted bids for other blocks in the auction.

Q: When can we expect further details about the agreement between Shell and the Trinidad Government?
A: Negotiations are still underway, and further details about the agreement are expected soon.

Q: What is the Manatee gas field, and how will it enhance Shell’s gas production capacity?
A: The Manatee gas field is part of the Loran-Manatee discovery, which will enhance Shell’s gas production capacity by providing additional gas supplies to support its liquefaction trains.

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