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Mon 9 Apr 2012 07:44 PM

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Kuwait mulling oil options if Hormuz is closed

Kuwait Petroleum Corp could transport oil to the UAE, says CEO Farouk al-Zanki

Kuwait mulling oil options if Hormuz is closed
The Strait of Hormuz

Kuwait Petroleum
Corp is considering alternative ways of exporting crude if the Strait
of Hormuz is closed, including the possibility of transporting oil to
the United Arab Emirates, said CEO Farouk al-Zanki.

“We’re
discussing many scenarios but we have not decided which,” al-Zanki told
reporters on Monday in Kuwait. “Of course this has to be decided at a much
higher level than KPC.”

The
possibility of exporting crude through the UAE is “an idea someone
brought up,” al-Zanki said. Such a decision has to be taken in
coordination with other Gulf Cooperation Council members, he added.

Iran
threatened earlier this year to close the waterway at the mouth of the
Persian Gulf in response to sanctions that the US and Europe are
imposing because of the Islamic republic’s nuclear programme.

A pipeline
that would allow crude oil from the UAE to bypass the Strait of
Hormuz separating the country from Iran is almost complete and will be
operational by May or June, UAE Oil Minister Mohamed al-Hamli, said
in January.

Kuwait has
no firm plans to store oil on tankers outside the Gulf, “but this could
be thought of,” al-Zanki also said. “It’s an idea that was discussed
before, this could be a choice.”

Kuwait, the
fourth-biggest producer in the Organization of Petroleum Exporting
Countries, plans to use more gas to produce power and free up more of
its crude for export, al-Zanki said.

The country uses 350,000 barrels of
oil-equivalent in summer months and will need 4 billion standard cubic
feet per day of gas by 2030, he said.

Kuwait,
which imports 500 million standard cubic feet per day of liquefied
natural gas in the summer months for power generation, may start to
import throughout the year as soon as 2013, according to al-Zanki.

Kuwait,
which pumps an average of 3 million barrels a day, has spare output
capacity of 150,000 to 200,000 barrels, Kuwait Oil Co chairman Sami
al-Rushaid told reporters on Monday. The country will conduct surveys of
undersea oil reservoirs this year “to determine whether to go ahead with
offshore drilling,” which will probably take place in 2012, he said.

Kuwait may need help from foreign oil companies depending on the complexity of the reservoirs, al-Rushaid said.

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