Shell Dragon Gas Project, 2 U.S. License Revocations, $3 B Investment, and 3 Cross-Border Agreements (2021 to 2026)

Geopolitical Risk Defines Trinidad-Venezuela Gas Project Commercial Progress

The commercial viability of Trinidad and Tobago’s strategy to import Venezuelan gas is dictated entirely by a volatile cycle of U.S. sanctions policy, creating a start-stop environment for development. Progress on key projects like Dragon and Cocuina-Manakin does not hinge on technological or market readiness but on the issuance and revocation of political licenses from Washington.

• Between 2021 and 2024, activity was largely confined to planning and high-level agreements. The most significant milestone was Venezuela’s granting of a 20-year license to BP and Trinidad’s NGC for the Cocuina-Manakin field in July 2024, yet no physical work commenced.
• The period from 2025 to 2026 introduced extreme uncertainty. The U.S. revoked two licenses for Trinidad-Venezuela gas projects in April 2025, effectively halting momentum. This decision was reversed in October 2025 when the U.S. granted a crucial two-year license for the Dragon project, allowing Shell to proceed with development.
• Tangible progress followed the October 2025 license, with Shell initiating subsea survey work for the pipeline route. However, the project’s fragility was again highlighted when Venezuela briefly suspended energy agreements with Trinidad in October 2025, demonstrating that political risk is a bilateral issue.
• By early 2026, momentum shifted positively again as BP and Shell were actively seeking new U.S. licenses for their shared fields, and Venezuela formalized its strategic agreement with BP in May 2026.

Key Project Milestones and Catalysts for Trinidad and Venezuela

Investment decisions and project advancements for the Trinidad-Venezuela gas initiatives are not driven by typical market signals but are direct consequences of regulatory and political events. The timeline of licenses and inter-governmental agreements serves as the primary roadmap for capital allocation and project execution.

• The most critical catalyst was the October 2025 decision by the U.S. Office of Foreign Assets Control (OFAC) to grant a two-year license for the Dragon field. This single event unlocked the potential for a $2-3 billion investment and moved the project from ambition to an active development plan.
• Conversely, the revocation of licenses in April 2025 demonstrates the primary financial risk. It highlighted that any invested capital or planning effort could be stranded instantly by a shift in U.S. foreign policy, making long-term financing a significant challenge.
• Venezuela’s legal reforms in March 2026, which granted foreign companies more autonomy, represent a critical de-risking event from the Venezuelan side. This action improved investor confidence by addressing operational and commercial concerns, complementing the U.S. license grants.

Table: Timeline of Key Regulatory and Political Events (2024-2026)

Caribbean Focus, Shell and BP Lead Cross-Border Gas Development

The geographic scope of this energy shift is intensely focused on the maritime border between Trinidad and Venezuela, leveraging geographic proximity to existing infrastructure as the core strategic advantage. All significant commercial activity is concentrated in this narrow corridor, transforming it into a critical nexus for Caribbean energy security.

• The primary operational area is the waters between northeast Venezuela and Trinidad’s north and east coasts. Projects like Dragon, Manatee, and Cocuina-Manakin are all located here, designed to tie back to Trinidad’s existing platforms and pipelines.
• Trinidad’s role is to act as the processing and export hub. Its Atlantic LNG facility and Point Lisas petrochemical complex are the ultimate destinations for the Venezuelan gas, making Trinidad the essential monetization partner.
• Venezuela provides the resource base, with the Dragon field alone holding an estimated 3.5 to 4.2 trillion cubic feet (Tcf) of gas. This integration provides Venezuela a low-cost, capital-efficient route to market for its stranded assets.

Mature Technology Deployed in High-Risk Geopolitical Environment

The underlying technology for these cross-border projects, including offshore gas extraction and subsea pipelines, is mature and well-understood. The primary challenge is not technological but the successful application of this standard technology within a uniquely complex and politically volatile operating environment.

• The core technical plan for the Dragon project involves a new pipeline to connect the Venezuelan field to Shell’s existing Hibiscus platform in Trinidadian waters. This is a standard offshore engineering project, leveraging existing infrastructure to reduce cost and development time.
• Between 2021 and 2024, the technology remained on the shelf as political and regulatory hurdles prevented its deployment. The maturity of the technology was never in question; the barrier was access.
• The period from 2025 to today has seen the first real-world application of this technology in this context, with Shell beginning preliminary subsea survey work in October 2024. This marks the transition from conceptual planning to physical execution, validating the technical feasibility once political approvals are granted.
• The success of these projects will validate a model of using established infrastructure to unlock stranded resources, a template that could be applied elsewhere but is entirely dependent on navigating non-technical, above-ground risks.

Trinidad’s Gas Use Dominated by Exports, Petrochemicals

This chart demonstrates Trinidad’s established downstream industry (LNG exports, petrochemicals), which serves as a strong proxy for the ‘Mature Technology’ and infrastructure in place to process gas from new projects.

(Source: IMF eLibrary – International Monetary Fund)

SWOT Analysis for the Trinidad and Venezuela Gas Integration Strategy

The strategic rationale for integrating Venezuelan gas with Trinidad’s infrastructure is strong, but it is balanced by formidable external threats that have defined its progress. The evolution from 2021 to 2026 shows a validation of the core opportunity, but an intensification of the primary political threat.

Trinidad & Tobago Gas Production in Long-Term Decline

This chart perfectly illustrates a critical ‘Weakness’ within a SWOT analysis. The long-term decline in domestic gas production is the primary driver for Trinidad to seek cross-border gas integration.

(Source: Natural Gas World)

Table: SWOT Analysis for the Trinidad-Venezuela Gas Initiative

Scenario Modeling: U.S. License Renewal is the Sole Decisive Factor

The forward-looking outlook for the Trinidad-Venezuela gas projects hinges on a single, binary event: the renewal of the U.S. OFAC licenses beyond their 2026 expiration. All technical planning, commercial agreements, and market analyses are secondary to this political decision.

• If licenses are renewed, expect Shell and BP to accelerate development, targeting first gas from Dragon by late 2027 or 2028. This would trigger final investment decisions on related infrastructure and solidify Trinidad’s role as a regional gas hub.
• If licenses are not renewed, all project activity will halt immediately. This would strand invested capital, force Trinidad’s Atlantic LNG to continue operating at reduced capacity, and leave Venezuela’s gas reserves undeveloped.
• A signal to watch is the diplomatic traffic between Port of Spain and Washington. The intensity and success of the Trinidadian government’s lobbying efforts have been directly correlated with past license grants and will be the leading indicator of future policy.
• Another signal is the status of broader U.S.-Venezuela relations. The gas licenses are a tool of U.S. foreign policy; any broader rapprochement or renewed hostility between the two countries will directly impact the specific licenses granted to Shell and BP.

Dragon Gas Project Critical for Revenue Growth

This chart quantifies the high stakes involved, framing the project as ‘Critical for Revenue Growth.’ This directly supports the ‘Scenario Modeling’ section, which analyzes outcomes based on a ‘decisive factor’ like a U.S. license.

(Source: LinkedIn)

The questions your competitors are already asking

This report covers one angle of the geopolitical risks defining the commercialization of Trinidad-Venezuela gas exports. The questions that matter most depend on your work.

• What is actually happening with the Shell-led Dragon gas project since the U.S. granted a two-year license in October 2025?
• What is the outlook for Venezuelan gas exports to Trinidad, considering the volatile start-stop cycle of U.S. sanctions policy?
• Are the Dragon and Cocuina-Manakin projects progressing from high-level agreements to physical development?

This report does not answer these. Enki Brief Pro does.

Your question, your angle, your framework. SWOT, PESTL, scenario modelling. The same niche depth, built around the decision your work actually depends on.

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