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Kuwait looking to natural gas, nuclear options |
VIENNA: Kuwait is considering an import terminal for liquefied natural gas, gas imports from Iran and Iraq and nuclear power to help it match soaring demand for electricity, its energy minister said yesterday.
Kuwait was in discussions with Royal Dutch Shell and BG Group on a possible LNG import terminal and also for exploration and development of the country’s gas reserves, Sheikh Ali al-Jarrah al-Sabah said.
“We are discussing an LNG terminal and have already started talking to major players in that field,” he told reporters.
Another potential option is importing gas from Iran and Iraq, he said, and Kuwait is in talks with both.
Power demand in the region was rising so quickly that Kuwait and other Gulf Arab states were seriously considering nuclear power plants.
“We are in very serious talks (about nuclear power),” he said. “We have to consider alternatives with the cost of fuel and gas.”
Any outages at power plants could cause a repeat of the power outs this summer that hit the country last year, he said.
As consumers crank up air conditioning units in the summer, power demand could reach as much as 10,000MW, equivalent to Kuwait’s power capacity at the moment, he said. The country aims to add another 1500MW of capacity by the summer to meet peak demand, Sheikh Ali added.
Kuwait also needed a fourth oil refinery, he said.
But bids from companies competing to build the planned 615,000 bpd Zour refinery were very expensive, he added.
“We will reconsider the project but there is no question that we need a fourth refinery,” the minister said. “The prices that we have received were unbelievable,” he added.
The minister, in Vienna for today’s Opec meeting, said he would not support any possible cut in the group’s oil output and that Kuwait favoured Opec making no change in the group’s output policy.
Many oil ministers have already said they expect Opec to leave its output unchanged.
Sheikh Ali said that international political tension was adding around $8-$15 a barrel to the price of oil, but even so crude price was not causing pain to consumers and producers.
“We are in the situation that suppliers and consumers, are fine with the market... they are happy (with the price),” he said.
For Kuwait, the preferred price for the basket of crudes that Opec members produce was between $55 and $60 a barrel, he said. The Opec basket is typically valued at $5-$6 below the US light crude benchmark, which stood just above $58 yesterday.
Kuwait was not concerned about a potential for an economic slowdown after the recent slide in global stock markets.
“We have to sit and watch the behaviour of the stock market,” he said. “You can’t predict the economy.”
Sheikh Ali said he would meet with investment banks Morgan Stanley and Lazard soon to discuss the results of their review into a controversial $8.5bn plan to boost the country’s oil output.
He said he hoped that there would be progress on the scheme, known as Project Kuwait, before the end of the year.
At least two oil majors had confirmed they were still interested in the project, he added. The project has been under discussion since the early 1990s, but opposition figures in parliament have said there was no reason to boost output with state coffers fattened by high oil prices.
Chinese officials have responded positively to plans of a joint venture between Kuwait and PetroChina to build a new refinery and petrochemical complex in south China, he said.
He did not know when China would make a decision on the refinery, which would have capacity of between 400,000 bpd and 500,000 bpd.
Sheikh Ali declined to comment on a Kuwaiti newspaper report this week that he may swap jobs with Kuwait’s finance minister.
“I am just a soldier,” he said. “I’m not giving orders.”
Kuwait holds nearly a tenth of the world’s oil reserves and produces about 2.5mn bpd. – Reuters |
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