Kuwait targets LNG, reduced flaring, Al-Zour rejig for 2050 net-zero goal

State-owned Kuwait Petroleum Corp. has developed plans to rely on LNG, reduced flaring of gas, renewables and a refocus of the country’s giant Al-Zour refinery to achieve its goal of attaining net-zero emissions by 2050, 10 years before the country, a KPC source told S&P Global Commodity Insights via a series of email exchanges this month.

Kuwait has budgeted $110 billion for the transition, including a commitment to achieve a sustainable crude capacity of 3.5 million b/d by 2030 and 4 million b/d by 2035 through 2040, the person said. Kuwait's current OPEC production quota is 2.41 million b/d, with output at 2.43 million b/d in September, according to the latest Platts OPEC survey from Commodity Insights.

“Oil is still anticipated to retain the highest share of the world's primary energy demand until 2040, and KPC will keep on supplying crude at the lowest emissions intensity globally,” the person said.

New energy efforts include installing 18,000 electric vehicle charging points in and outside of Kuwait by 2050, 120,000 mt/year of plastics recycling capacity by 2050, 13 million mt/year of second-generation biofuels production worldwide by 2050 and 1 million mt/year of green hydrogen production by 2050, the person said.

KPC is in the feasibility stage on which renewables to use to achieve 17 GW of capacity by 2050, with current operations mostly small-scale, including solar panels in parking areas and buildings, the person said.

LNG imports

Kuwait is the Middle East’s largest LNG importer, with 6.57 million mt of the fuel imported so far in 2024, already higher than last year’s 6.52 million mt, according to Commodity Insights data. In August, QatarEnergy announced an LNG sales and purchase agreement with KPC to provide up to 3 million mt/year of LNG over 15 years starting in January 2025. The deal will effectively double KPC's contract supply obligations from QatarEnergy at the start of 2025, after it signed a separate 15-year, 3 million mt/year contract in 2020 to begin in 2022.

The LNG is used by Kuwait's power plants, which face growing power demand, especially in the hot summer months. The country aims to accelerate the development of new gas-fired generation to meet this growing demand.

In April, Kuwait’s Ministry of Finance awarded a tender for the construction of 900 MW of new combined cycle gas turbine capacity at the Sabiya Power Plant, targeting completion by 2025, according to Commodity Insights research. Tendering was also ongoing as of August for the Al-Zour North 2 and 3 and Al-Khairan IWPP projects, which collectively aim to add 4.5 GW of new CCGT capacity. The growth rate of LNG demand in Kuwait will depend partly on the speed of new capacity development, especially during peak summer months when the country imports the majority of its LNG, according to a Commodity Insights report on Aug. 27.

Kuwait aims to join its 615,000 b/d Al-Zour refinery with a new petrochemicals project, intended to have annual production capacity of 2.761 million mt/year of aromatics and propylene and 1.7 million mt/year of gasoline in the long term, according to the website of Kuwait Integrated Petroleum Industries, the KPC subsidiary which operates Al Zour.

“In the short term, we have the flexibility to replace the low sulfur fuel oil supplied to [state-owned utilities] with more environmentally and economically advantageous LNG,” the KPC source said. “By doing so, we have taken advantage of the LNG market by securing relatively low-cost LNG and exporting low sulfur fuel to high-demand markets, thereby generating greater overall value.”

As for gas flaring, Kuwait Oil Co., the KPC subsidiary which manages Kuwait’s domestic hydrocarbons, has reduced total gas flaring to below 1% since 2020 from about 17% in 2005, the person said.

Kuwait Gulf Oil Co., which manages Kuwait’s share of production in the Neutral Zone shared with Saudi Arabia, is starting projects to reduce gas flaring to 1% “in the medium term,” the person said, declining to provide the current flaring. Kuwait National Petroleum Corp., which operates refining, gas liquefaction and products distribution in the country, has installed “efficient heaters” and taken other steps to abate half of a metric ton of carbon dioxide equivalent/year, the person said. The unit is also studying heat recovery through heat integration and power recovery from steam “let-down” and reusing excess hydrogen as fuel, the person said.

KPC has pledged to reach zero routine flaring for its domestic upstream assets by 2030, and for all of its subsidiaries by 2040. Abatement efforts include renewables and carbon capture, utilization and storage.