British energy giant Shell has put its Aphrodite offshore natural gas project in Trinidad & Tobago on hold, arising from disagreements over commercial terms with the country's National Gas Company (NGC).
Reuters reports that Shell had given the project the green light last year, but has now decided not to proceed for the time being after negotiations over the sale of the gas broke down.
Aphrodite was expected to produce approximately 100 million cubic feet of natural gas per day, providing a boost to Trinidad & Tobago's gas supplies.
NGC acts as the country's gas aggregator, purchasing gas from producers and supplying it to various industries, including the petrochemical sector and Atlantic LNG, where Shell holds a 45 per cent stake.
As part of the decision, Shell has released a jack-up drilling rig that had been contracted to drill the production wells.
Shell confirmed to Reuters that negotiations are continuing and that the initial rig slot for Aphrodite has been released.
The company says it will continue to assess the overall schedule for the integrated project.
The setback comes even as Trinidad & Tobago seeks to reverse years of declining natural gas production, which has affected LNG exports and contributed to reduced output in the petrochemical sector.
Industry players have increasingly identified commercial challenges, including gas pricing, as a factor behind the closure of several petrochemical plants.
The Aphrodite project was expected to provide a modest increase in domestic gas supplies.
Meanwhile, Trinidad & Tobago is looking to Venezuela for additional supplies, as Shell and BP advance plans to develop cross-border gas resources.
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