An article carried by Manhattan-based financial news service, Bloomberg, is suggesting that Russian state-controlled gas giant Rosneft PJSC could seek to develop close ties with Trinidad and Tobago, to produce gas from two gas fields given to it by Venezuela.
The article suggests that Trinidad and Tobago's LNG trains in Point Fortin could be used to develop the gas for export.
An accord signed by both Russia and Venezuela earlier this month will give Rosneft tax breaks to produce and export gas from the Patao and Mejillones fields off Venezuela’s east coast.
Bloomberg reports that the fields are estimated to hold 6.4 trillion cubic feet of natural gas and that the fields are less than 100 kilometers (62 miles) from Trinidad and Tobago, where declining domestic output has left export facilities with spare capacity that could be filled by output from Venezuela.
It says that Rosneft would have two options to export the gas, one being to build a liquefied natural gas plant in Venezuela, and the other, to pipe the gas to Trinidad where there are LNG trains with spare capacity.
The article states: "Venezuela doesn’t have LNG facilities, Antero Alvarado at the consulting firm Gas Energy Latin America said, and Russia doesn’t have strong commercial ties to nearby Trinidad, the obvious place to initially sell it. The deal suggests Russia may push to have a bigger presence in Trinidad in the future."
The possibility of Russia developing closer ties is already causing concern among some in Caracas, according to the Bloomberg report.
The report notes: “Deepened Russian involvement with regional energy producer Trinidad is a cause for concern, Caracas Capital Markets, a brokerage, said in a note to clients. The Russians already dominate gas production in Asia and Europe and are developing massive further capacity in Siberia and the Arctic.”
Rosneft has been picking up Venezuela's oil company PDVSA's assets since 2011 when it bought the company’s stake the Ruhr Oel GmbH refining company in Germany.
It went on to take stakes in three heavy oil project in the Orinoco basin, as well as two joint ventures in the Lake Maracaibo region.
Since 2014, Rosneft has loaned about $6.5 billion to Venezuela in exchange for oil, according to data compiled by Bloomberg. Petroleos de Venezuela SA, or PDVSA, has been repaying the loans by delivering barrels to Rosneft, and had an outstanding debt of about $1.8 billion in the first quarter, according to a company presentation.
As a result of the changes signed by Russian President Vladimir Putin, Rosneft and its suppliers will be exempt from value-added and import taxes to develop the two gas fields, which are near to where Exxon Mobil Corp. is rushing to extract oil in neighboring Guyana.
The agreement was filed online by the Russian legal information website, which publishes orders by the president and applied international treaties.
Rosneft is also considering entering another natural gas block, known as Deltana 5, that’s much closer to a border that’s been hotly contested, according to two people familiar with the plan.
Maduro has vowed to block Exxon from exploring in the contested area.