Qatar signs a new 15-year LNG supply deal with Kuwait
Kuwait Petroleum Corporation (KPC) and Qatar Energy (QE) formalized a long-term agreement for the import of liquefied natural gas (LNG), under which KPC will receive up to three million metric tonnes annually over the next 15 years.
The agreement was signed by Qatar’s Minister of State for Energy Affairs and CEO of Qatar Energy Eng. Saad bin Sherida Al Kaabi and KPC’s Vice Chairman and CEO Sheikh Nawaf Saud Al Nasser Al Sabah at the KPC’s headquarters in Kuwait City on Monday.
The signing ceremony was attended by senior officials from both nations’ oil sectors, highlighting the continued strengthening of their bilateral energy cooperation.
The new agreement builds upon a previous 2020 deal in which Qatar began supplying KPC with 3 million metric tons of LNG annually starting in 2022. Sheikh Nawaf Al-Sabah emphasized the strategic importance of this extension, which reflects the robust and evolving energy partnership between Kuwait and Qatar. He highlighted that this extension not only reinforces the countries' commitment to mutual energy interests but also aligns with Kuwait’s broader energy transformation strategy aimed at 2050. The agreement is expected to bolster Kuwait’s efforts to secure sustainable and reliable energy supplies while addressing environmental concerns.
The import of LNG under this agreement is expected to play a crucial role in Kuwait’s efforts to transition to cleaner energy sources. By utilizing LNG, KPC aims to reduce harmful emissions and enhance air quality, particularly in electricity generation.
This commitment to cleaner energy is in line with Kuwait's strategic objectives to minimize its environmental footprint while ensuring a stable energy supply for its future needs.
Qatar, already Kuwait’s biggest supplier with an existing contract running until 2035, will start shipments from the new deal next year.
Kuwait was forced to cut power earlier this year as brutal summer heat increased demand, and gas supply couldn’t keep up. The Ministry of Electricity, Water and Renewable Energy has warned that controlled outages could be enforced in some areas throughout the hot months.
The latest deal will add to Qatar’s agreements with companies including TotalEnergies SE, Shell Plc, China Petroleum & Chemical Corp and Taiwan’s CPC Corp, as it further expands its massive LNG projects.
Qatar is set to bolster its production capacity by 64% to 126 million tonnes a year and to 142 million tonnes within the decade.
The increase in gas demand also comes after Kuwait decided to phase out burning oil to produce electricity. It boosted consumption far beyond its domestic production. The country imported 6.3m tonnes of LNG in 2023, including spot cargoes, according to reports.
Kuwait forecasts a demand of 14m tonnes of LNG per annum by 2035. In 2021, it opened a 22m-tonne-a-year terminal, the first permanent facility for receiving LNG on the Persian Gulf.
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