The state-owned Kuwait Petroleum Corporation (KPC) signed a contract with British Petroleum (BP) to secure part of Kuwait's needs of liquefied natural gas (LND) over the coming five years.
In a press conference on the sidelines of the signing ceremony, KPC's International Market Managing Director Nasser Al-Mudhaf said that British Petroleum, as per the deal, would provide Kuwait with 6-8 annual LNG shipments over five years.
With this deal, the KPC marketing sector has managed to secure Kuwait's needs of LNG till the end of November, Al-Mudhaf said. He, however, admitted that the agreed upon quantities just meet the minimum of Kuwait's LNG needs.
Any additional LNG needs, during the summer, would be secured through spot delivery contracts, he stated.
Al-Mudhaf underlined that the contract with BP will save the state treasury's huge sums of money.
The contract was signed after three years of negotiations and talks, he unveiled, noting that Kuwait owns a four-percent share in British Petroleum. He explained that KPC negotiates and signs contracts with LNG providers, on behalf of the Ministry of Electricity and Water, to secure its needs of natural gas for power generation and other purposes.
Ministry of Electricity and Water's facilities consume 2.5 million tons of LNG on a daily basis, Al-Mudhaf said, adding that this figure is expected to go up to seven million tons per day after five years.
Regarding the LNG purchasing contract which KPC signed with Shell, Al-Mudhaf the Royal Dutch Shell, as per the deal, would provide Kuwait with 18 LNG shipments a year for six years at competitive prices.
He argued that Shell is able to send LNG shipments to Kuwait from many production sites in the region which is a great privilege. He also touched upon the third LNG contract which KPC has recently signed with Qatargas at a total value of USD 3.5 billion.
The very close distance between Kuwaiti and Qatari ports make it easy to get supplied with LNG needs quickly, Al-Mudhaf said, clarifying that a LNG tanker moving from Qatar can take 16 to 18 hours to reach Kuwait.
There are initial talks with Qatargas to contract on importing four to five million tons of LNG per day as of 2019, he disclosed. On a different issue, Al-Mudhaf revealed that there is an agreement with Egypt to use Sumed pipeline to transport up to two million oil barrels per day to Egyptian and European markets.
He elaborated that about 300,000-500,000 barrels of this amount are sold on the Egyptian market, and the residue is exported to European markets. He announced that great efforts are exerted by KPC currently to enter new markets and to increase its shares on others.
In this regard, KPC is working to have a share in oil Australian market after entering the New Zealand market, he said, noting that Kuwait provides New Zealand with 30,000 barrels of crude oil per day. The KPC is also planning to increase its quota on the several other markets including the Indian one, Al-Mudhaf said.
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