Kuwait National Petroleum Company (KNPC) has tendered the main contract for a new floating liquefied natural gas (LNG) storage and regasification terminal as it seeks to meet the Gulf state’s rising demand for imported gas.
The facility, which will be berthed at the Mina al-Ahmadi refinery site in southern Kuwait, will be used to import LNG and feed the country’s gas network during peak electricity demand.
KNPC tendered the contract on 21 October, with prequalified companies asked to submit bids by a deadline of 2 December. The three qualified international bidders and their local partners are:
- Excelerate Energy (US)/Gulf Agency Shipping
- Golar LNG (Bermuda)/Joint Scientific Group
- Hoegh LNG (Norway)/Gulf Agency Shipping
The vessel will be designed with a throughput of at least 550 million cubic feet a day (cf/d) during a seven-month regasification season each year, rising to 700 million cf/d at peak demand periods.
Kuwait became the first Gulf country to start LNG imports, unloading its first cargo in August 2009 at the existing 500 million cf/d terminal at Mina al-Ahmadi, which was supplied by Excelerate Energy.
Plans for a new terminal suggest that Kuwait will not be able to meet its rising gas needs by developing domestic reserves, which are largely tied to crude production.
In its first year of operation, the first Mina al-Ahmadi gas receiving terminal handled just 11 cargoes. By 2011, the number had jumped to 38, resulting in Kuwait’s gas consumption exceeding domestic production by almost 400 million cf/d.
Even with the imports, gas made up barely a third of the electricity sector’s fuel requirements in 2011 resulting in Kuwait having to burn an estimated 200,000 b/d of liquid fuels, which could otherwise have been exported.
Kuwaiti gas consumption has risen 35 per cent over the last five years to 16.2 billion cubic metres in 2011, while production increased only 7 per cent to 13 billion cubic metres over the same time, according to data from UK oil major BP.
Kuwait is not the only GCC country attempting to plug its gas deficit with LNG imports. The UAE is now planning the construction of a second LNG terminal, while Bahrain is also eyeing a major imports project.