LNG

Kuwait Integrated Petroleum Industries Co. (KIPIC) said all construction has formally been completed at the onshore LNG import terminal at Al-Zour, the largest in the Middle East, and constructed to provide fuel and power to the refining and petrochemicals industries.

A South Korean consortium comprising Hyundai Engineering Co., Hyundai Engineering & Construction Co. and Korea Gas Corp, also confirmed that the project had been executed.

The Hyundai-led consortium won the construction project valued at $2.9 billion back in 2016 from KIPIC, an affiliate of state-run Kuwait Petroleum Corp.

While the terminal was developed by KIPIC, it is owned by national oil and gas company KPC.

The Kuwait terminal is located about 90 kilometres southeast of Kuwait City and about 16km from Kuwait’s border with Saudi Arabia.

It consists of a regasification facility capable of liquefying 130,000 cubic metres of gas per day and eight LNG storage tanks, with four in the first phase, and each with 225,000 cubic metres of capacity.

A statement noted that Hyundai Engineering was in charge of the overall management of the project including design, licensing and the construction of core facilities.

Hyundai E&C was responsible for the building of the LNG storage tanks and reclamation of 7 million cubic metres of land from the sea.

Kogas, the owner of four LNG import terminals in South Korea, conducted test runs through July 2021 when the first commissioning cargo was delivered and since then has run operational training.

World-class facility

The Korean consortium said they shortened the construction period by more than six months even under the restrictions of the Covid-19 pandemic.

“Through the successful completion of this project, we have proved our world-class LNG plant construction and technological capabilities,” said a Hyundai Engineering statement.

Hyundai Engineering added that the LNG facility would provide the Middle East country with a stable gas network to respond to the rising call for energy diversification.

Kuwait already has a 15-year contract with QatarEnergy to buy 3 million tonnes per annum of LNG for the Al Zour facility.

Energy company KPC additionally plans to buy another 3.5 MTPA from the open market or through short-time contracts.

Until recently, Kuwait has imported LNG via a floating storage and regasification unit (FSRU) at the dockside of Kuwait’s Mina Al-Ahmadi port. The FSRU has been in operation since 2009.

Oil exporter Kuwait is also focussing on ramping up its own natural gas production as part of its economic growth strategy through to 2040.

The use of LNG in the Middle East is forecast to expand by around 50 percent through 2025, with most of the increase coming from Kuwaiti demand.

Kuwait’s domestic natural gas requirements are increasing in line with other Middle East nations and it is already receiving additional deliveries from suppliers such as the US exporters on the Gulf Coast of Louisiana and Texas.

The expansion in infrastructure comes as Kuwait and its neighbour, the United Arab Emirates, are listed 20th and 29th respectively in the list of 42 destinations for shipments from US exporters.

The Gulf Arab economies are among the world’s biggest oil consumers on a per capita basis, in part because of the heavy use of crude in their electricity grids.

Analysts note that the state of Kuwait, like the other Gulf Cooperation Council members, is embarking on an ambitious path of economic growth fuelled by more domestic natural gas use and less oil utilization.

Several of Kuwait’s neighbours are also trying to phase out oil from their power markets, including the UAE and Saudi Arabia. They are also turning to renewable projects and hydrogen development.

At the same time they must focus on building up their petrochemical and oil exports industries to monetize their resource heritage for the good of their citizens.

Kuwait Integrated Petroleum Industries Co. (KIPIC) has unloaded its first liquefied natural gas shipment at the Arab state’s onshore Al-Zour import terminal, the largest in the Middle East, and constructed to provide fuel and power to the refining and petrochemicals industries.

German LNG Terminal, the joint venture company developing the European nation’s first regasification facility at Brunsbuettel on the Elbe River near the port of Hamburg, has chosen four groups to compete for the engineering, procurement and construction contract.