Qatar to sign 15-year LNG supply deal w/ Kuwait

Qatar is poised to sign a new deal to supply liquefied natural gas (LNG) to Kuwait for 15 years. This marks Qatar’s second supply contract with Kuwait, where it already has a deal in place until 2035.

The new agreement, set to be signed in Kuwait on Monday, will enable Kuwait to buy as much as 2 million tons of LNG a year, addressing the increased strain on its power plants.

Kuwait, which experienced rare power cuts earlier this year, has been grappling with a surge in electricity demand caused by extreme summer heat. Qatar, which is already its biggest supplier with an existing contract running to 2035, will commence shipments from the new deal next year, a source told Bloomberg.

The latest deal with Qatar is crucial as Kuwait phases out oil burning for electricity, significantly increasing its LNG imports.

In 2023, Kuwait imported 6.3 million tons of LNG and is projected to need 14 million tons per year by 2035, with plans to expand its importing infrastructure further. The new deal with Qatar aligns with Doha’s broader ambitions to increase its LNG production capacity by 64 per cent to 126 million tons annually, with further expansion expected by the decade’s end.

Attribution: Bloomberg

Subediting: Y.Yasser