Image Credits : Financial Tribune
Qatar Energy has signed a 15-year agreement with Kuwait Petroleum Corporation (KPC) to supply up to 3 million tonnes per annum (mtpa) of liquefied natural gas (LNG) to Kuwait. The deal, which will see deliveries commence in January 2025, further strengthens the long-standing energy partnership between the two Gulf nations.
Under the terms of the agreement, Qatar will deliver LNG to Kuwait’s state-of-the-art Al-Zour LNG receiving terminal, one of the largest import facilities in the Middle East. The Al-Zour terminal, strategically located near Kuwait City, is crucial for meeting the country’s rising energy demands, particularly during the scorching summer months when electricity consumption surges due to air conditioning and other cooling needs.
This latest deal follows a previous long-term LNG supply contract signed in 2020 between the two nations, underscoring the deepening energy ties between Qatar and Kuwait. The agreement is also part of Qatar’s broader strategy to solidify its position as the world’s leading exporter of LNG. Currently, Qatar is engaged in an ambitious expansion of its North Field, the largest non-associated natural gas field globally. By 2030, Qatar aims to boost its LNG production capacity from 77 mtpa to 142 mtpa, securing its dominance in the global LNG market for years to come.
The new LNG supply contract is particularly significant for Kuwait, as the country seeks to diversify its energy sources and reduce its dependence on crude oil. The Kuwaiti government has set ambitious goals under its Vision 2040 initiative, focusing on the development of cleaner energy solutions and the reduction of carbon emissions. By securing a steady supply of LNG, Kuwait can ensure the continued stability of its electricity grid, particularly during peak demand periods, while also transitioning towards more sustainable energy sources.
For Qatar, the deal is another testament to its growing influence in the global LNG market. By leveraging its vast natural gas reserves, Qatar has established itself as a key player in energy diplomacy, striking long-term deals with nations across Asia, Europe, and the Middle East. As global demand for cleaner energy sources rises, particularly in response to climate change concerns, Qatar’s ability to provide stable and scalable LNG supplies gives it a strategic edge.