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Kuwait enters club of gas producers
(Kuwait Times Via Thomson Dialog NewsEdge)KUWAIT: Kuwait, which already sits on 10 per cent of global oil reserves, has finally entered the club of gas producers after unveiling the discovery for the first time of huge quantities of natural gas. "We can say now that Kuwait has entered the world of natural gas," Kuwaiti Energy Minister Sheikh Ahmad Fahd Al-Sabah told a press conference late Monday while announcing the discovery of reserves estimated at one trillion cubic metres of non-associated gas. "This is a qualitative leap for Kuwait which has now entered the scope of a new energy industry," former Kuwaiti oil executive Kamel Al-Harami said yesterday. "This is a third stream of income for Kuwait after revenues from oil and return on foreign investments," estimated at well over $100bn, Harami told AFP.
The main discovery was made at the fields of Um Niga-1 and Sabriya in northern Kuwait, with smaller quantities at two other fields in the same region. Kuwait's new gas find was of vital strategic importance to the country and will make it virtually independent from the deals it sought to enter with neighbouring countries like Iraq, Iran and Qatar for gas supply, said Sheikh Ahmad. Saudi Arabia had recently blocked the construction of a pipeline across its territory through which Kuwait had wanted to import Qatari gas.
Kuwait has also signed provisional agreements with Iraq to import six million cubic metres daily and with Iran for a daily supply of nine million cubic metres. "The reserves we discovered make us do without imports," said Sheikh Ahmad, adding there is great potential for larger reserves as exploration was still ongoing. But he stressed Kuwait would still want to go ahead with the two deals after the agreement with Qatar has faltered. Kuwait needs natural gas to operate its power generation and water desalination plants and its sprawling petrochemicals industry for environmental reasons and in order to free oil used domestically for export.
Production however will not start until late next year after completing the necessary surface and infrastructure facilities. Sheikh Ahmad told reporters yesterday before leaving for Vienna to attend the Opec meeting that a key report on the gas find will be ready by next November when it will be decided how to proceed further. "Kuwait will need huge investments to start gas production. They need to build the infrastructure, pipelines, segregation facilities and others. They need billions of dollars," said Harami. "I think Kuwait will need foreign expertise to utilise the gas because the country does not have any previous experience with exploiting free-gas," he said.
Sheikh Ahmad said he does not know yet how much investments will be pumped into the gas industry but it is likely to be clear after November. "Kuwait will become like other gas producing nations such as Qatar and Iran," said Sheikh Ahmad. Qatar is one of the biggest producers of liquefied natural gas (LNG) and its giant North Field is the world's third largest with proven reserves of more than 25 trillion cubic metres of natural gas. Kuwait, a member of the Organisation of Petroleum Exporting Countries (Opec), pumps about 2.6 million barrels of oil a day and has been enjoying a windfall from surging oil prices. The tiny emirate has amassed $30bn in budget surpluses during the past six fiscal years and is forecast to post about a $23bn windfall in the current fiscal year which ends on March 31. - AFP
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