OREANDA-NEWS. November 25, 2016. Trinidad and Tobago plans to sign a natural gas purchase agreement with Venezuela in Caracas on 5 December that the Caribbean country hopes will alleviate a chronic gas shortage.

"Ministers from Trinidad and Venezuela have been working on the agreement and are close to a conclusion," Trinidad's prime minister Keith Rowley said yesterday. "Industrial plants in this country are in danger of shutting down because of the shortage of gas." Under the agreement Trinidad would purchase gas from Venezuela's offshore Dragon field. The undeveloped field is part of Venezuelan state-owned PdV?s Mariscal Sucre complex off the Paria peninsula.

"This will bring both countries closer to another agreement to monetize their cross-border resources," an official of Trinidad's energy ministry told Argus, alluding to separate gas deposits that straddle the maritime border.

Trinidad?s gas production has been falling over the past three years, reaching 3.338bn ft?/d (93.5mn m?/d) in January-September 2016, 13.8pc less than the corresponding 2015 period.

The downturn has triggered supply curtailments of between 20pc and 30pc that have depressed Trinidad?s production of LNG and petrochemicals, particularly ammonia and methanol.

Rowley and Venezuelan president Nicolas Maduro agreed in May 2016 to discuss the delivery of gas to Trinidad from the Dragon field. The supply to Trinidad would require construction of a 17km pipeline from Venezuelan waters to the Shell-operated Hibiscus platform in the North Coast marine area of Trinidad.

Shell is discussing the project with Venezuela and Trinidad, the company told Argus in July, adding that it could not give details as the discussions were "confidential."

Trinidad's state-run gas company NGC is offering to finance construction of the pipeline, Rowley said in May.

Venezuelan officials have not commented on the supply deal, but its implementation would hinge on PdV?s development of Dragon. The company is in a precarious financial state and is courting foreign partners to foot capital expenditures in oil and gas projects.

Trinidad underutilized Atlantic LNG plant at Port Fortin could give the Venezuelan firm a steady revenue stream for its gas, but Atlantic?s complex ownership structure across four trains could complicate negotiations.