Shell Secures Key Gas Project in Strategic South American Move

Shell gets final U.S. approval to develop Venezuela's Dragon gas field, aiming to supply its Trinidad LNG plant within 3 years and address regional supply shortages.

Energy giant Shell has received the final regulatory approval to proceed with a major natural gas development that had been stalled for years. The project, located in Venezuelan waters, marks a significant strategic advancement for the company's integrated gas business and the regional LNG supply chain.

U.S. Authorization Unlocks Development

The green light comes following the issuance of new exploration licenses by U.S. authorities, permitting Shell to operate in Venezuelan maritime territory. The development will focus on the Dragon field, which holds estimated reserves of approximately 4.5 trillion cubic feet of natural gas. Production from the site is slated for export via the Atlantic LNG facility in neighboring Trinidad and Tobago.

Shell holds a 45% stake in this liquefaction plant, a share mirrored by BP. The National Gas Company of Trinidad and Tobago (NGC) owns the remaining 10%. According to Shell CEO Wael Sawan, first gas from the Dragon field is expected to flow within a three-year timeframe.

Addressing Regional Supply and Capacity

The launch of this project addresses a critical regional shortfall. The Atlantic LNG facility has been operating below its annual capacity of 12 million tonnes due to insufficient local gas supply. The Dragon field's output is designed to directly remedy this deficit, thereby significantly improving the utilization rate of the existing export infrastructure.

This strategic development coincides with Shell's ongoing commitment to shareholder returns. The company is actively advancing its current share buyback program, which is authorized for $3.5 billion and runs through May 1, 2026. Investment bank Morgan Stanley is executing the repurchases on Shell's behalf.

The initiation of the Dragon project strengthens Shell's position in the global gas market by securing a new supply source in a geopolitically significant region. The simultaneous progress on major capital projects and consistent capital return to investors underscores the company's dual focus on long-term growth and shareholder value.