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2026 goal is a year ahead of original 2027 start date

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US license for Dragon project remains active - Trinidad's

NGC

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Shell plans to drill 3 wells at Dragon project, sources

say

By Curtis Williams

HOUSTON, March 20 (Reuters) - Shell Plc ( SHEL ) is

aiming to begin producing natural gas at Venezuela's Dragon gas

field and exporting it to neighboring Trinidad and Tobago in

2026, a year ahead of the original 2027 start date, according to

two people familiar with the project.

The project illustrates industry hopes that there will

continue to be exceptions on U.S. sanctions on Venezuela,

despite recent stricter enforcement. The partners plan to start

survey work next month and have decided to drill three wells,

the people said, adding that it will need a renewed U.S. license

later this year.

U.S. sanctions target virtually the entire Venezuelan oil

and gas industry, which is controlled by state company PDVSA

, meaning countries like Trinidad and private

operators that abide by the measures require U.S. authorizations

to export or pay revenue to sanctioned entities including the

government, the central bank and PDVSA.

Such a U.S. authorizing license for Dragon was first granted

in early 2023 and extended later through October 2025.

Trinidad's National Gas Company said the license remains in

effect. "NGC and Shell continue to work assiduously on the

Dragon Project and remain committed to achieving first gas as

soon as is reasonably possible," it said in a statement.

Shell did not respond to a request for comment.

Trinidad's government last month said it would brief

Washington on the importance of keeping U.S. licenses to develop

gas projects with Venezuela for reasons of regional energy

security.

The timeline for first production is being moved up as Shell

tries to secure gas supplies to ramp up production of liquefied

natural gas at Trinidad's Atlantic LNG project.

Last year, the flagship Atlantic LNG project produced 8.5

million metric tons, 4 million tons short of its installed

capacity, because of insufficient gas, according to preliminary

data from LSEG.

Earlier this month, BP, the other major shareholder

in Atlantic LNG, announced that it would decommission the

project's first liquefaction train, which was idled in 2020 due

to lack of gas.

Dragon has an estimated 4 trillion cubic feet of gas

reserves and is just across the maritime border from a Trinidad

field that has a pipeline to the Atlantic LNG facility.

Shell is expected to begin an environmental baseline survey

in April to look at the waves, sea currents, earth movement and

marine life, as part of the engineering work to construct a

roughly 10 miles (16 km) pipeline from Dragon to its facilities

in Trinidad, the sources added.

Venezuela in 2023 granted a 30-year license to Shell and NGC

to explore and produce the gas field. A final

investment decision by Shell is expected this year, after a

decision from Washington on the extension of the U.S. license.

Washington earlier this month terminated a key license for

U.S. major Chevron ( CVX ) to operate in Venezuela. Since then,

there have been signals by the Trump administration that it is

going to take a harder line on Venezuela. However, the U.S. has

so far not announced any cancellation of licenses related to

energy projects between Venezuela and Trinidad.