Gulf nations arrange cargo deal for region’s largest import facility to be built to far
LNG Journal editor
Qatar Petroleum has signed a long-term supply agreement with Arab Gulf neighbour Kuwait for the supply of liquefied natural gas cargoes for a period of 15 years at a new larger Kuwaiti onshore regasification terminal currently under construction.
Qatar signed the Sale and Purchase Agreement with Kuwait Petroleum Corp. for the supply of up to 3 million tonnes per annum.
The deal was signed in Kuwait City by Khaled A. Al-Fadhel, the Kuwaiti Minister of Oil and Electricity and Water and Qatari Minister of State for Energy Affairs Saad Sherida Al-Kaabi, whose is also President and Chief Executive of Qatar Petroleum.
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.
Cargoes of LNG are shipped at present to the dockside facility at Mina Al-Ahmadi in Kuwait which 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.
“Under the 15-year agreement, LNG deliveries to Kuwait's new world-class LNG receiving terminal at Al-Zour Port will commence in 2022 to support Kuwait's growing energy needs, particularly in the power generation sector,” said the joint statement.
The Kuwait project includes the construction of a regasification facility, eight LNG storage tanks with a capacity of 225,000 cubic metres, and marine facilities, including two jetties for loading.
The facilities will also include other components, such as 14 HP pumps, boil-off gas (BOG) and flare facilities.
KNPC awarded the contract to the Hyundai-led consortium also including Hyundai E&C and Korea Gas Corp. The contracts were worth around $1.5 billion.
Once fully operational, the facility is expected to handle around 15 million tonnes per annum of LNG and with storage for 22MT of natural gas a year.
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.
“We are pleased and proud to join hands with Kuwait Petroleum and we look forward to providing reliable LNG supplies to our brothers in the State of Kuwait for decades to come,” said Qatar Petroleum CEO Al-Kaabi.
“This agreement extends Qatar's long-standing LNG supply relationship with Kuwait well into the 2030s and highlights our commitment to meeting Kuwait's LNG requirements,” added Al-Kaabi.
“We are confident that the exceptional reliability of our LNG supplies will provide KPC with the required flexibility and supply security to fuel the State of Kuwait's impressive growth,” he stated.
Kuwait Oil Minister Al-Fadhel said he was delighted with the Qatar Petroleum LNG deal.
“The state of Kuwait is embarking on an ambitious path of economic growth, which requires cleaner energy sources such as natural gas that will contribute to reducing emissions and improving local air quality,” added Al-Fadhel.