KUWAIT, June 22 - Royal Dutch Shell has signed a deal to supply Kuwait with liquefied natural gas (LNG) starting this summer, a Shell spokeswoman said on Monday.
Kuwait is one of the world's highest per capita consumers of electricity and is short of gas for power generation to meet peak summer demand for air conditioning.
"We've signed a sales and purchase agreement with Kuwait Petroleum Corporation for the provision of LNG," the Shell spokeswoman said. State-owned KPC is the umbrella company for Kuwait's energy operations.
Shell was also looking at several business opportunites with KPC, both locally and internationally, the spokeswoman added, declining to give more details.
She also declined to detail the volume of LNG to be delivered, the price, or the duration of the contract.
Kuwait has been building facilities to begin importing 500 million cubic feet per day of LNG, which is gas chilled to liquid form for export on specially designed tankers. The Gulf Arab state is also in negotiations with nearby Qatar to buy LNG to help meet the summer shortfall.
Kuwait expects its first LNG cargo from Shell by the start of August after completing the construction of its new import facility at the port of al-Ahmadi, KPC's Managing Director of International Marketing, Abdullatif Al-Houti, told state news agency KUNA earlier.
A source close to KPC told Reuters Kuwait is still talking to Qatar but has yet reach a deal. Soft international markets for gas amid the global downtrun 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."
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, and is also studying gas supply and imports to 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.
Kuwait is one of the world's highest per capita consumers of electricity and is short of gas for power generation to meet peak summer demand for air conditioning.
"We've signed a sales and purchase agreement with Kuwait Petroleum Corporation for the provision of LNG," the Shell spokeswoman said. State-owned KPC is the umbrella company for Kuwait's energy operations.
Shell was also looking at several business opportunites with KPC, both locally and internationally, the spokeswoman added, declining to give more details.
She also declined to detail the volume of LNG to be delivered, the price, or the duration of the contract.
Kuwait has been building facilities to begin importing 500 million cubic feet per day of LNG, which is gas chilled to liquid form for export on specially designed tankers. The Gulf Arab state is also in negotiations with nearby Qatar to buy LNG to help meet the summer shortfall.
Kuwait expects its first LNG cargo from Shell by the start of August after completing the construction of its new import facility at the port of al-Ahmadi, KPC's Managing Director of International Marketing, Abdullatif Al-Houti, told state news agency KUNA earlier.
A source close to KPC told Reuters Kuwait is still talking to Qatar but has yet reach a deal. Soft international markets for gas amid the global downtrun 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."
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, and is also studying gas supply and imports to 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.
