The necessity of revitalizing Iran’s gas contract with Kuwait

According to Energy Press; Last week, the Kuwait Oil Company and Qatar Energy signed an agreement to import 3 million tons of liquefied natural gas (LNG) to the UAE starting in 2025 for 15 years. Nawaf Al Saud Al Sabah, Executive Director of Kuwait Oil Institute and Saad Al Kaabi, Minister of Energy of Qatar and Executive Director of “Qatar Energy” signed this long term agreement. At the contract signing ceremony, Al Saud said: This is the second agreement of its kind signed with Qatar Energy Company and it shows the strength of bilateral relations in all fields, including energy.
Kuwait is classified as the largest liquefied gas import market in the Middle East, which is done by operating the port of Al-Zour region with a capacity of 22 million tons per year. Although Kuwait is a gas-producing country, there is insufficient domestic production for domestic consumption, especially the electricity sector that relies on fossil fuels, which if the demand increases with unprecedented temperatures, as the country is currently witnessing. It faces a challenge.
The amount of LNG imported by Kuwait from the beginning of 2024
Qatar remains the largest exporter of liquefied natural gas to Kuwait in the first 7 months of 2024, followed by Nigeria, the United States, Russia and Angola. Official data shows that the volume of Kuwait’s gas imports from Qatar has reached 2.25 million tons between January and the end of July 2024. Kuwait Oil Company signed an agreement with Qatar Energy Company on Monday, August 26 (2024), which includes the annual import of 3 million tons of liquefied gas for a period of 15 years, and Al-Zour port in Kuwait is scheduled to receive these shipments from 2025.
This is the second agreement between Qatar and Kuwait, after the agreement signed in 2020 and its implementation starting in 2022, which includes the import of 3 million tons of liquefied gas. Nigeria exports 0.58 million tons of liquefied gas to Kuwait, followed by America with 0.49 million tons. Russia, of which Kuwait imported about 0.21 million tons in the period under review, was in the next place. Kuwait also imported about 0.08 million tons of liquefied gas from Oman, followed by Trinidad and Tobago with 0.07 million tons.
After clarifying the issue of where Kuwait imports liquefied gas from, we will monitor the volume of this country’s import of this fuel in the first seven months of 2024. According to official data, between January and July 2024, Kuwait’s liquefied natural gas imports increased by 0.74 million tons to 3.88 million tons, compared to 3.15 million tons in the same period last year. Also, in the first quarter of 2024, Kuwait’s imports increased to 1.12 million tons, while this figure was 0.58 million tons in the same quarter last year.
In the second quarter of this year, this figure continued to 1.9 million tons compared to 1.7 million tons in the same period in 2023. In July 2024, Kuwait’s liquefied gas import recorded its highest level in the first seven months of 2024 with 0.87 million tons. In the meantime, Kuwait’s natural gas production reached 9.51 billion cubic meters in the first half of 2024, which has decreased compared to 9.53 billion cubic meters in the same period of 2023.
The role of gas in Kuwait’s electricity production
Where Kuwait imports LPG is important, but it should be noted that the amount of imports stems from the fact that gas is the country’s largest source of electricity. According to Ember Think Tank data, the electricity sector in Kuwait will be 99.78% dependent on fossil fuels in 2023, with gas accounting for 55.98% of the total electricity generation mix, followed by oil for 43.8%.