Qatar Strikes LNG Supply Deal with Kuwait

Qatar Petroleum (QP) has clinched a 15-year deal to supply Kuwait with LNG, it announced in a statement on January 5.

Under the agreement, signed with Kuwait’s oil ministry and government-run Kuwait Petroleum (KPC), QP will ship up to 3mn mt/yr of LNG to the small Persian Gulf state starting in 2022, when a $3bn import terminal at Al-Zour port is due to come on stream.

The supplies will help Kuwait reduce its emissions and improve local air quality, its oil minister Khaled al Fadhel said.

Kuwait already receives LNG from QP alongside BP and Shell, with total imports coming to 2.5mn mt/yr. The country wants to bolster the share of gas in its generation mix to cut down on the use of more polluting fuel oil. And despite efforts to increase domestic production, it has resorted to LNG imports in recent years to cope with growing demand for power.

“Whilst KPC is working towards increasing local natural gas production, there remains a pressing need to secure imports of natural gas supplies,” Fadhel said in a statement.

For Qatar, the new deal will help underpin its plan to ramp up LNG production capacity to 126mn mt/yr by 2027 from the current 77mn mt.