Energy thirst: Kuwait is seeking LNG for power generation
Shell seals Kuwait LNG deal
State run Kuwait Petroleum Corporation (KPC) has signed a deal with Shell to import liquefied natural gas needed for power generation, according to local media reports.
Kuwait expects its first LNG cargo by the start of August, Kuwait state news agency KUNA said, citing KPC's managing director of international marketing, Abdullatif Al-Houti.
Kuna did not give details on how much gas would Kuwait import.
KPC officials and Shell spokespeople were not immediately available for comment.
Kuwait has been building facilities to begin importing 500 million cubic feet per day of gas starting this summer, and was in talks with Qatar to import LNG.
A source close to KPC told Reuters Kuwait is still talking to Qatar but has yet reach a deal. The soft market favoured buyers over sellers, he said.
"There is more supply than demand in the LNG market now. Production is expected to increase and prices have dropped significantly," said the source. "Negotiations with Qatar are still ongoing but Kuwait needs gas now because demand for electricity has increased a lot over the recent years."
Kuwait has one of the highest per capita power consumption rates in the world. The Gulf Arab state experiences peak gas demand in the summer, when gas-fired power stations strain to meet demand for air conditioning as desert temperatures peak.
Shell has signed several deals to take a role in nascent LNG trade within the Gulf. It has a supply deal with Dubai in the United Arab Emirates, has also signed up to study gas supply and imports in Bahrain.
Shell signed a deal with Iraq last year to collect gas that is burned at oilfields in the country's south. Some of that gas may be exported as LNG.