Qatar has signed a new long-term sale and purchase agreement with Royal Dutch Shell to deliver 1 million tonnes per annum of liquefied natural gas to the neighbouring Gulf state of Kuwait starting in 2020.
This accord between Qatargas and Shell for the supply of LNG to Kuwait follows the recent pact signed between Qatar Petroleum and Kuwait Petroleum Corp.
Cargoes of LNG are shipped at present to the dockside facility at Mina Al-Ahmadi in Kuwait. This terminal has been in operation since 2009.
However, the Gulf nation is building a second and larger onshore terminal close to a new refinery complex at Al-Zour, about 90 kilometres south of Kuwait City.
The new Kuwaiti terminal is being constructed by a consortium led by Hyundai Engineering Co. of South Korea.
“These agreements demonstrate our commitment to Kuwait, which is a very important LNG market,” said the Qatari Minister of State for Energy Affairs, Saad bin Sherida al-Kaabi, who is also President and Chief Executive of Qatar Petroleum.
He added that the new SPA further underlined Qatargas’s position as the a market leader in LNG and demonstrated the company’s track-record of providing reliable LNG to the global market place.
The supplies will come from the Qatargas IV Train at Ras Laffan. This is a joint venture owned 70 percent by Qatar Petroleum and 30 percent by Shell.
Kuwait’s domestic natural gas demand is increasing in line with other Middle East nations and it is already receiving additional deliveries from new suppliers such as the US.
The expansion in infrastructure comes as Kuwait and its neighbour, the United Arab Emirates, are already among the top 20 destinations for shipments from US exporters such as Cheniere’s Energy’s Sabine Pass export plant in Louisiana.
The state of Kuwait, like the other Gulf Cooperation Council members is embarking on an ambitious path of economic growth.
This requires cleaner energy sources such as natural gas that will contribute to reducing emissions and improving local air quality, while also supplying energy for industry and domestic consumption.