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Qatar and Kuwait Finalize 15-Year LNG Supply Contract
- Contrimex Overseas
- Sep 26, 2024
- 2 min read
In a major step to strengthen energy collaboration, Qatar has committed to providing Kuwait with 3 million tons per annum (mtpa) of liquefied natural gas (LNG) over the next 15 years. The chief executives of Qatar Energy and the Kuwait Petroleum Corporation (KPC) signed this agreement, signifying the second deal of its kind between the two countries since 2020.
Key Details of the Agreement
The long-term sales and purchase agreement has been formalized in Kuwait, with deliveries scheduled to begin in January 2025. Sheikh Nawaf al-Sabah, the CEO of KPC, emphasized the significance of this agreement in addressing Kuwait's increasing power generation needs, particularly during the intense summer months when the demand for air conditioning surges.
Strategic Importance for Kuwait
As an OPEC member and significant oil producer, Kuwait is progressively depending on imported gas to meet its energy demands. This trend aligns with a wider strategy to boost domestic gas output and expand oil production capabilities. The recent power outages in Kuwait, linked to local gas supply challenges, highlight the urgent necessity for dependable energy sources.
Qatar’s Expanding LNG Capabilities
Qatar's dedication to this agreement is reinforced by its ambitious North Field expansion project. Revealed earlier this year, the initiative seeks to increase LNG production from 77 million tonnes per annum (mtpa) to 142 mtpa by 2030, cementing Qatar's status as a top global LNG exporter. It is expected that the LNG provided to Kuwait will originate from both the North Field expansion and Qatar's current production capabilities.
Future Prospects
The recent agreement expands upon the 2020 deal between Qatar and Kuwait, which included the supply of 3 million tonnes per annum (mtpa) of LNG. The concurrent contracts will guarantee a consistent and dependable supply of LNG to Kuwait, which is crucial for the nation's electricity production and comprehensive energy strategy.
Sheikh Nawaf highlighted the confidentiality of the deal's financial details but confirmed that it would make a substantial contribution to Kuwait's energy security and sustainability objectives.
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