Venezuela and Trinidad and Tobago will continue negotiations on jointly developing a dormant offshore natural gas field, with a meeting scheduled for mid-June in Caracas, according to three sources familiar with the matter.

Officials from both governments last met in March in Venezuela, where they signed confidentiality agreements required to set up a negotiation framework, following the issuance in January of a two-year U.S. license green-lighting talks for the project.

The Dragon Field, which lies along the maritime border of the two nations, holds up to 4.2 Tcf of gas. Trinidad needs the fuel to boost its liquefied natural gas and petrochemical industries, and Venezuela hopes to have access to cash flow from gas exports.

If negotiations go well, gas technically could begin flowing in two years, Trinidad's energy minister, Stuart Young, told Reuters in March.

Trinidad's National Gas Company (NGC) and the nation's energy ministry are expected to hold technical workshops in preparation for the Caracas meetings next month, two of the sources said.

Trinidad and Tobago, Latin America's largest exporter of LNG and one of the world's largest exporters of methanol and ammonia, is not producing enough gas, which has led to the suspension of one of its liquefaction trains and the other three operating below capacity.

U.S. Assistant Secretary of State for Energy Resources Geoffrey Pyatt last week told local media in Trinidad that any extension of the license will "depend on Venezuela's President Nicolas Maduro and what happens in Venezuela."

Offshore