Royal Dutch Shell plc (NYSE:RDS.A) is making moves in Kuwait. Meeting up to the ever growing domestic energy demand in Kuwait hasn’t been easy. The oil exporting nation signed a 15-year liquefied natural gas import deal with Royal Dutch Shell to keep up with demand.
The company for its part gave its statement on Sunday where it disclosed that all arrangements had been completed. The sales purchasing agreement is planned to start in 2020 and it is expected to go through smoothly considering that these parties have had the opportunity to work together in the past.
Since 2010 Shell has remained committed to supplying Kuwait with the liquefied super-cooled fuel. How much of the product was covered under the new contract remains undisclosed.
The company declined to comment in relation to the matter plunging the deal into some confusion. On one hand Kuwait is trying its best to boost its natural gas production and on the other hand it seeks to secure natural gas supplies but this will be associated with numerous challenges.
The spokesperson of Royal Dutch Shell opined, “LNG could help meet Kuwait’s domestic demand for power to run air conditioners during hot summer months and cut the amount of crude oil burned instead of exported for profit. The contract will cover 2 million to 3 million metric tons of LNG a year, priced at 11 percent below a Brent benchmark.”
The chief executive officer of Dubai-based Qamar Energy, Robin Mills in his recent statement said that the major concern in Kuwait lay in the fact that it burns a lot of oil. Kuwait continues to search for cleaner burning energy and one way to go about it is to opt for natural gas which will indeed help cut down on emissions as well as improve air quality. Business dynamics in the industry are at the moment compelling most of the companies to take new approaches to help them maintain their relevance.