Trinidad Wins Six-Month Reprieve on Dragon Gas License Amid Shortage

Trinidad and Tobago got its Dragon field back this week, sort of. Attorney General John Jeremie confirmed on October 9 that the United States Treasury had issued a fresh license letting Port of Spain reopen talks with Venezuela over the cross-border gas field it had all but written off in the spring. The catch sits in the fine print: the authorization runs for roughly six months, expiring in April 2026, and it permits negotiation only. It does not clear a single cubic foot of gas to flow, and it does not promise a long-term deal on the other side.

For a country whose gas production has been sliding for more than a decade, even a conditional reprieve counts as relief. But it is a short leash, and everyone in Port of Spain knows it.

What Washington actually granted

The license came from the Office of Foreign Assets Control, the same Treasury arm that has policed sanctions on the Maduro government for years. It replaces the authorization the Trump administration revoked in April 2025, when it ordered Trinidad, Shell and the National Gas Company to wind down all Venezuela-related work by late May as part of a broader squeeze on Caracas.

This new permission is narrower and more tightly staged than the 2023 original. Officials describe it as a tiered arrangement: the first phase, running through April 2026, allows the parties to negotiate. Separate approvals would be needed later for development and then for production. In other words, Trinidad has been allowed to talk, not to build, and certainly not to sell. Reporting on the terms also points to a requirement for greater U.S. involvement in any structure that emerges, a condition designed to keep Washington's hand on the valve.

Secretary of State Marco Rubio had signaled the shift in early October, telling Prime Minister Kamla Persad-Bissessar that the U.S. would support Trinidad's Dragon ambitions provided any arrangement fit within OFAC rules and limited the financial benefit flowing to the Maduro administration. That last phrase is the whole ballgame. The 2023-era framework reportedly guaranteed Venezuela a minimum 45 percent of gross income from the field, exactly the kind of cash pipeline Washington now wants to choke off.

Why Trinidad needs this so badly

Trinidad's problem is arithmetic. National gas output peaked around 4 billion cubic feet a day in 2010. By 2024 it had fallen to roughly 2.53 bcf/d. Atlantic LNG, the country's flagship export plant and one of the older LNG facilities in the Western Hemisphere, has spent years running short of feedgas. Declining supply has forced train shutdowns and left capacity idle. Dragon was supposed to be the fix.

The field sits in Venezuelan waters, close to Shell's existing Hibiscus platform, which made a tie-back look almost tidy on paper. Estimates of what Dragon holds vary by source, from roughly 4 trillion cubic feet of gas in reserve to a production target in the range of 350 to 600 million cubic feet a day once developed. The nearby Manakin-Cocuina field, where NGC had partnered with BP, adds more than a trillion cubic feet on top. First gas had originally been penciled in for 2026. That timeline is now, at best, aspirational.

The catch nobody in Port of Spain can control

Here is the uncomfortable part. Even a clean OFAC license does not settle the question of who Trinidad negotiates with. The gas is Venezuelan, and Venezuela's political situation is unresolved.

Dragon gas is the property of the Venezuelan people. Whenever they choose a leader through free and fair democratic elections, that leader will make a decision on Dragon gas.

That was Persad-Bissessar's own framing, and it captures the bind precisely. Washington's pressure campaign is aimed at removing Maduro, not at accommodating him. A negotiation license that forbids meaningful payment to the current government is, functionally, a license to talk to a counterparty the United States hopes will not be there much longer. The commercial logic and the political logic point in opposite directions, and Trinidad is standing in the gap.

Shell, NGC and the money already spent

The revocation earlier in the year was not costless. Trinidad's National Gas Company took a real financial hit when the original licenses were pulled, having sunk work and expectation into a project that vanished overnight. Shell, which operates the Dragon acreage and the adjacent Hibiscus infrastructure, has declined to comment on where development stands now. That silence is telling. A major does not restart front-end engineering on the strength of a six-month talking permit, especially one that could lapse or be revoked again if the diplomatic weather changes.

The practical effect is that Trinidad has bought time rather than certainty. The tiered structure means that clearing the negotiation phase only earns the right to ask for the next approval, and the one after that. Each gate is a chance for Washington to say no.

What it means for the LNG market

For the wider gas trade, Dragon has always been a marginal-volume story with an outsized regional weight. A few hundred million cubic feet a day will not move global prices. But it matters intensely for Atlantic LNG's viability and for the Caribbean supply picture. If Dragon gas eventually flows, it props up an aging export plant and keeps Trinidad in the LNG business. If it stalls again, Atlantic's feedgas math keeps deteriorating.

There is a longer shadow, too. Analysts watching the broader market note that if Venezuelan gas ever finds buyers beyond Trinidad, whether through Colombia or new export schemes, it adds volume to a global LNG market already bracing for oversupply later this decade. That is a bearish note for anyone long on LNG, and a reason the fate of one small field off the Venezuelan coast draws attention well outside Port of Spain.

For now, Trinidad has a six-month window, a stack of conditions, and a counterparty whose government the United States is actively trying to unseat. It negotiates against that backdrop until April. Whether the reprieve becomes a deal, or simply a delay before the next revocation, depends less on the gas than on the politics wrapped around it.