Woodside Energy and the Government of Trinidad and Tobago have reached a preliminary agreement on commercial terms for the development of the Calypso deepwater gas project, reports Reuters, citing sources.
This development brings the project closer to a final investment decision, a key milestone in Trinidad’s efforts to optimise its gas processing facilities.
The agreement involves the unitisation of two adjacent deepwater blocks, where Woodside has confirmed 3.5 trillion ft3 of natural gas reserves.
This arrangement is expected to preserve only the areas with discoveries, thereby reducing Woodside's operational costs.
According to sources, this strategy will also lessen the company's tax obligations as it will be taxed for a single block instead of two, and it will make upfront payments, including bonuses, on one block.
Trinidad is pushing gas producers, particularly those operating offshore, to increase output and fully utilise the country's processing capacity.
Recent years have seen a decline in LNG production and exports due to a shortfall in gas supplies.
Woodside's Trinidad Country Manager, Kellyanne Lochan, confirmed the initial agreement and unitisation of the blocks, stating that combining the blocks will improve efficiency.
Speaking to Reuters on the sidelines of Trinidad's Energy conference in Port of Spain, Lochan said: “We are focused on working with the government and our joint venture partner to move the project forward.”
The Calypso project is currently in the pre-engineering and design phase, and Woodside must finalise these plans and submit a development proposal before proceeding to the FID.
Woodside operates the block, with UK oil and gas major bp holding a 30% stake.
The gas produced there is expected to be primarily supplied to the Atlantic LNG project for conversion into LNG for export.
The development comes as the Latin American nation’s LNG revenue has surged following a late 2023 contract overhaul that introduced new financial terms for Atlantic LNG participants.
According to Trinidad’s Energy Minister, Stuart Young, LNG cargoes are being sold at premiums of 15 - 55% above Henry Hub prices.
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/13022025/woodside-and-trinidad-agree-on-commercial-terms-for-calypso-deepwater-gas-project/