Shell plc ( SHEL Quick Quote SHEL - Free Report) has given the green light to contractor, McDermott International Ltd, to commence engineering work on the Manatee gas field development project in a significant move toward addressing Trinidad and Tobago's ongoing natural gas shortage.
The project, situated off Trinidad and Tobago's east coast, aims to boost the nation's liquefied natural gas (LNG) exports, as the flagship Atlantic LNG project and associated petrochemical plants have been operating at reduced capacity due to a shortage of natural gas.
Houston-based engineering and construction company, McDermott, revealed on Tuesday that it has received authorization to proceed with the engineering, procurement, construction and installation contract, pending a final investment decision (FID). Trinidad and Tobago's Energy Minister, Stuart Young, conveyed a positive outlook regarding SHEL's upcoming endorsement of the project, anticipating that the news of an FID from Shell on the Manatee project would be received shortly.
A Shell spokesperson confirmed that the project is advancing and the company anticipates reaching the FID next year. The Manatee gas field is projected to begin production as early as 2028, contributing 700 million cubic feet per day to alleviate the nation's gas shortfall. The field, part of the cross-border Loran-Manatee discovery shared by Trinidad and Venezuela, holds an estimated 10 trillion cubic feet (tcf) of natural gas. Venezuela's side accounts for 7.3 tcf, with the remaining 2.7 tcf on Trinidad's side.
The two countries had engaged in years of negotiations to develop the reservoir and signed preliminary agreements. However, the process faced a setback in 2019 when the United States imposed sanctions on Venezuela's energy industry, delaying the final deal. This year, SHEL submitted a field development plan, which was accepted by the government of Trinidad and Tobago, outlining the peak production of 700 million cubic feet per day of gas.
Mahesh Swaminathan, senior vice president of Subsea and Floating Facilities at McDermott, commented on the recent authorization, stating that this award follows the construction company’s successful delivery of the front-end engineering design for the Manatee gas field.
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Shell currently carries a Zacks Rank #3 (Hold).
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