Doha: Economic experts and analysts emphasized that the agreement signed between QatarEnergy and Kuwait Petroleum Corporation (KPC) to supply up to three million tons of liquefied natural gas (LNG) annually to the State of Kuwait for 15 years will achieve gains for both parties and will positively reflect on the economic and trade relations between the two fraternal countries, and will strengthen bilateral cooperation between QatarEnergy and KPC, in addition to helping meet the demand for energy in the sisterly State of Kuwait.
QatarEnergy announced on Monday that pursuant to the terms of the agreement, the contracted LNG volumes will be delivered ex-ship to Kuwait’s Al Zour LNG Terminal onboard QatarEnergy’s conventional, Q-Flex, and Q-Max LNG vessels, starting in January 2025.
In remarks on this occasion, HE Minister of State for Energy Affairs, the President and CEO of QatarEnergy Eng. Saad bin Sherida Al Kaabi welcomed the signing of the agreement and said: “I am pleased to be in Kuwait, a country that
is dear to our hearts, and to build a new long-term partnership between KPC and QatarEnergy, that constitutes a central element in supporting Kuwait’s sustainability goals, particularly in the electricity generation sector. It also reflects our commitment to support the future needs of all our clients, foremost of which is KPC.” This new agreement is the second long-term LNG SPA with KPC, and is considered pivotal in further boosting bilateral trade between the State of Qatar and the State of Kuwait.
In this context, economic analyst Dr. Khaled Al Kuwari said that the agreement between the two countries has multiple benefits, as the two countries are basically brothers with a good and strong relationship and multiple social, cultural, and economic ties. The agreement also comes within the framework of exchanging benefits and enhancing trade and economic integration between them, in addition to the fact that the short distance facilitates the delivery process and reduces the cost of transportation in terms of
handling gas to the Kuwaiti side without delaying the transport ships or the Qatari tanker fleet.
In his remarks to Qatar News Agency , Al Kuwari pointed out that the State of Qatar has taken important decisions in the past few years and taken fundamental steps to strengthen its position among the most important influencers in the global gas industry, expecting its role in this field to grow in the future, especially in light of the trend of many economies in the world, such as China, India, and emerging economies, to rely on natural gas as a source of clean fuel.
For his part, oil and energy expert Dr. Amer Al Shoubaki affirmed that the agreement has multiple gains for both parties. He pointed out that the State of Qatar, under this deal, will strengthen its position in the region’s markets, especially the GCC countries, and will also expand the export of its increasing gas production, as the State of Qatar announced in February a new expansion of the North Field, under which the production of LNG will inc
rease from 77 million tons annually to 142 million tons annually before the end of 2030, which represents an increase of around 85 percent.
In his remarks to QNA, Al Shoubaki added that the agreement signed today goes in line with QatarEnergy’s plans to implement the new expansion project that will increase its production capacity and expand its export plans in the next phase, in addition to being part of the economic integration between the GCC countries.
He indicated that the major benefits for the Kuwaiti side lie in meeting the need for LNG to generate electricity instead of expensive diesel or fuel oil. He noted that the electric current faces some pressures, especially in the summer in Kuwait, and therefore this deal will work to secure Kuwait’s supply of the fuel needed to generate electricity and sustainability in generation and to meet the increasing demand for electricity in the future.
He pointed out that this deal is important, and is the second since 2020. According to the agreement, the perce
ntage of Qatari gas used in electricity production in Kuwait will increase and will also help Kuwait reduce the rate of carbon emissions resulting from the use of oil, fuel oil, or diesel in electricity generation, and thus lower emissions using gas, which is in line with the trend towards eliminating carbon emissions by 2050. In addition, the State of Kuwait will reduce the costs of generating electricity, which will positively reflect on the Kuwaiti budget, and thus reduce spending on electricity generation as it is reflected in its price for consumers.
The agreed shipments are scheduled to be delivered to the receiving terminal at Al Zour Port in Kuwait on board LNG carriers starting next January, which supports Qatar’s expansion of its gas carrier fleet. Last April, QatarEnergy announced the signing of a contract to build 18 advanced QC-Max LNG carriers with China State Shipbuilding Corporation (CSSC) for a value of USD 6 billion, in an important addition to its historic program to expand its LNG fleet,
each of which has a capacity of 271,000 cubic meters and features the latest technological innovations and environmental performance.
The agreement will enhance Qatar’s position in global and regional markets, especially the GCC countries, as well as regional markets, in addition to its pivotal role as an important supplier of gas to European markets, in conjunction with its expansion in Asian markets, which are considered its most important partners in the field of gas and are the markets with the highest demand for gas globally.
Source: Qatar News Agency