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Tue 30 Nov 2010 07:30 PM

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Kuwait to keep relying on fuel for power as gas tight

The Gulf Arab state has a shortfall of 1 billion cubic feet of gas per day

Kuwait to keep relying on fuel for power as gas tight
Kuwait has been slow to develop its gas reserves to meet domestic demand (Getty Images)

OPEC member Kuwait may continue burning more fuel to fire power plants due to limited gas output, the chief executive of Kuwait Petroleum Corp (KPC) said on Tuesday.

The Gulf Arab state does not have enough natural gas to meet power demand and burns a large volume of oil products at power stations.

Like its oil exporting neighbours, Kuwait has been slow to develop its gas reserves to meet domestic demand.

"The plan is to burn less oil than gas, but if worse comes to worse we will continue to use expensive fuel," Farouk al-Zanki told reporters on the sidelines of an industry conference in Doha.

The world's fourth largest oil exporter, which has a shortfall of about 1 billion cubic feet of gas per day (cfd), burns an average 200,000 barrels per day (bpd) to 300,000 bpd of fuel oil and gas oil per year, Zanki said.

Zanki said he hoped Dorra gas field would help raise gas supplies.

The Gulf Arab state pumps around 1 billion cfd of gas from oilfields, and 145 million cfd from gas fields not associated with oil.

It plans to nearly quadruple its gas production to 4 billion cfd by 2030. Output from the Dorra field is included in the plans.

But that field is shared with Iran and has been a bone of contention between Kuwait and Tehran since the 1960s, and the two have yet to strike a deal on how to develop it.

Zanki said an announcement for the reshuffle of executives at Kuwait Oil Co (KOC) and KPC might take place in December.

Kuwait is plugging the gap between supply and demand with imports of liquefied natural gas (LNG).

Tight supply has been exacerbated by OPEC member Kuwait's adherence to the producer group's oil output restrictions since late 2008.

As most of Kuwait's gas is a by product of oil production, when it pumps less crude, it pumps less gas.

To counter this constraint, Kuwait is working on a scheme to increase output of non associated gas fields to 1 billion cfd by 2016.

In February, state run Kuwait Oil Company signed a five year service contract with Royal Dutch Shell to develop gas

fields in the country's north.(Reuters)


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