Trinidad and Tobago's Natural Gas Renaissance: Riding Deepwater Waves to Energy Dominance

The tiny Caribbean nation of Trinidad and Tobago is poised to reclaim its title as a global gas powerhouse, driven by two landmark projects—BP's Calypso and Ginger—that promise to reverse decades of production decline. With final investment decisions (FIDs) nearing completion and geopolitical tailwinds aligning, these deepwater ventures offer investors a rare combination: high-risk-adjusted returns in an energy sector hungry for reliable, US-aligned supply.

The Decline and the Opportunity

Trinidad's gas production has plummeted by 33% since 2015, from 4.3 billion cubic feet per day (Bcf/d) to just 2.5 Bcf/d in 2024, as aging fields deplete and exploration lags. This decline has strained its LNG exports, which account for 46% of production, and left the government scrambling to attract investment. Enter BP's dual gambit: Ginger, now under construction, and Calypso, nearing FID. Together, they could add 1.4 Bcf/d by the late 2020s—more than half of Trinidad's current output—and unlock 3.5+ Tcf of reserves.

Ginger: The Near-Term Catalyst

BP's Ginger project, a shallow-water development tied to existing infrastructure, has already secured FID. Drilling began in January 2025, with first gas expected in 2027 and peak production hitting 62,000 barrels of oil equivalent per day (BOED). Its $1.5 billion budget leverages Trinidad's mature offshore network, minimizing costs and risks.

This project is critical to bridging Trinidad's 2027–2029 supply gap, as it will feed gas to the Atlantic LNG facility, where exports now command premiums of 15–55% above Henry Hub prices. For investors, Ginger's four-year payback period—thanks to high pricing and low execution risk—makes it a near-term winner.

Calypso: The Deepwater Prize

The Calypso project, a 3.5 Tcf deepwater gas field operated by Woodside Energy (with BP holding a 30% stake), is the linchpin of Trinidad's long-term revival. FID, originally slated for 2026, is now targeted for late 2025, accelerated by Trinidad's urgency to reverse production declines and Woodside's push to simplify its portfolio.

If approved, Calypso could deliver first gas by 2032, though delays are possible due to its complexity and multi-billion-dollar price tag. Even so, its 700 million cubic feet per day (MMcf/d) peak output would rival Trinidad's current total production, making it a game-changer.

Geopolitical Goldilocks: Stable, US-Aligned, and Strategic

Trinidad's rise benefits from its US alignment and political stability—a stark contrast to regional rivals like Venezuela, where sanctions and mismanagement have stifled output. As the US seeks to reduce reliance on Russian or Qatari gas, Trinidad's proximity and reliability make it an ideal partner.

Moreover, Trinidad's 2025 offshore block auction, offering 26 new exploration areas, signals government commitment to reviving its energy sector. This contrasts sharply with Guyana, where Exxon's dominance has deterred smaller players, and Venezuela, where geopolitical risks linger.

Risks and Rewards: A High-Conviction Play

The risks are clear: delays in FID, cost overruns, or a global gas glut could dent returns. Yet the high-risk-adjusted rewards are compelling. Trinidad's gas reserves—58.25 Tcf in total—are among the largest in the Caribbean, and its LNG infrastructure is already built.

For investors, BP's $10 billion annual upstream spend (prioritizing Trinidad over divested mature assets like Immortelle and Cashima) underscores its conviction. Meanwhile, Woodside's potential exit from Trinidad (selling assets to Perenco) could even create an opening for BP to assume operatorship, boosting its upside.

The Investment Case

• Near-term: Buy BP shares ahead of Ginger's first gas, leveraging its 20% dividend yield and Trinidad's premium LNG pricing.
• Long-term: Target Trinidad-focused E&P firms or LNG infrastructure plays, as Calypso's success could spark a new exploration boom.
• Avoid: Overexposure to projects contingent on Venezuela's revival, where US sanctions remain a wild card.

Trinidad's gas renaissance is no flash in the pan. With BP's projects set to flip the script on decline, and geopolitical winds favoring stability, this Caribbean diamond could shine brightest in a world craving reliable energy supply.

In an era of energy fragmentation, Trinidad—and BP's vision—are writing a new chapter. The question is: Will investors miss the boat?