Shell wins 15-year deal to supply LNG to Kuwait

31 December 2017
Contract extension won by Royal Dutch Shell to provide Kuwait Petroleum Corporation with gas will be in force from 2020

Kuwait Petroleum Corporation (KPC), the state-owned energy major, has signed a 15-year deal with Royal Dutch Shell to import liquefied natural gas (LNG) to be able to meet growing domestic energy demand.

According to Bloomberg, the sales purchasing agreement (SPA) with Shell International Trading Middle East. will start in 2020. The contract will cover 2 to 3 million metric tonnes of LNG a year.

The volumes delivered under the contract will be used to feed KPC’s power stations.

A press release said that Kuwait wants cleaner burning energy sources such as natural gas to reduce emissions and improve air quality.

The deal would ‘provide fuel to power stations in Kuwait’, KPC said in the statement, but did not disclose the value of the deal or the volumes that will be supplied.

The contract win for Shell can be viewed as a deal extension, as Kuwait’s oil company has previously secured LNG cargoes from Shell through agreements signed in 2010 for a four-year contract, and another signed in 2014 worth $12bn to secure supplies through to 2018.

Gas-hungry Kuwait is also looking at its $3.6bn-worth Jurassic gas project, which it had stalled a while back, before recently deciding to restart as MEED reported, to generate much-needed gas for power generation.

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