Kuwait’s LNG Imports: Replacing Fuel Oil in Power Generation Will Have Significant Impact on Global LNG Markets

With 4 charts

Natural gas demand is seasonal. Consequently, the global LNG market is not only sensitive to these seasonal changes, but also to the severity of the weather in the consuming countries. As a result, any sudden changes in small LNG-consuming countries can affect the global LNG market.  We have seen this before our eyes when Kuwait procured additional LNG cargos to meet the summer demand in 2023 and 2024.  If Kuwait acts on the plan to replace fuel oil in power generation with natural gas, its LNG demand will soar and will have significant impact on the global LNG markets.

Kuwait is the largest LNG importer in the MENA region and will remain the largest consumer for years to come. Despite its large oil and gas resources, Kuwait has been importing LNG since 2009 to meet the growing demand for electricity.  Since the beginning of 2024, Kuwait has increased its LNG procurement significantly, especially after it experienced power outages during the summer.  Its annual LNG imports are expected to reach an all-time high by the end of this year. The focus on LNG in recent years was part of a plan to meet energy needs, eliminate the use of oil in power plants, reduce emissions, and achieve carbon neutrality. 

In this article, we will discuss:

·       Gas supply in Kuwait and why it needs to import LNG.

·       The significance of Al-Zour LNG import terminal.

·       Outlook of power demand in Kuwait.

·       Impact on Global LNG Market.

Gas Demand and Supply in Kuwait