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Shell authorizes engineering, construction work on Manatee gas field

LNG 2023 energy trade show in Vancouver

By Curtis Williams

HOUSTON (Reuters) - Shell PLC has authorized contractor McDermott International Ltd to start engineering work on its Manatee gas field development project off Trinidad and Tobago's east coast, the contractor disclosed on Tuesday.

Trinidad is Latin America's largest liquefied natural gas (LNG) exporter, but its flagship Atlantic LNG project and its petrochemical plants have been operating at reduced capacity due to a shortage of natural gas.

McDermott said it got the green light to proceed on an engineering, procurement, construction and installation (EPCI) contract pending an investment decision. Trinidad and Tobago's Energy Minister Stuart Young said he expects Shell to soon approve the project.

"I expect in a very short time frame I will hear about a FID (final investment decision) from Shell on Manatee," Young told the country's Parliament.

A Shell spokesperson said the project is progressing and the company expects to reach FID next year.

Manatee is expected as soon as 2028 to produce 700 million cubic feet per day to help ease the nation's gas shortfall. Manatee is part of the cross-border Loran-Manatee discovery, shared by Trinidad and Venezuela.

The field holds some 10 trillion cubic feet (tcf) of natural gas, with 7.3 tcf on Venezuela's side and the remaining 2.7 tcf on Trinidad's side.

The countries negotiated for years to jointly develop the reservoir and signed preliminary agreements, but the U.S. imposed sanctions in 2019 on Venezuela's energy industry, stalling the final deal.

This year, Shell submitted, and the government of Trinidad and Tobago accepted, the field development plan that calls for peak production of 700 million cubic feet per day (mcfd) of gas.

"This award follows our successful delivery of the front-end engineering design for the Manatee gas field," said Mahesh Swaminathan, senior vice president, subsea and floating facilities at McDermott.

(Reporting by Curtis Williams in Houston; Editing by Josie Kao)