Kuwait reaps huge gas windfall

Kuwait has announced the discovery of more than 35 trillion cubic feet of untapped natural gas reserves.

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By  Andrew White Published  March 12, 2006

Kuwait has announced the discovery of more than 35 trillion cubic feet of untapped natural gas reserves. The huge find marks the first time that the emirate has unearthed non-associated gas in commercially viable quantities, and threatens provisional deals to import gas from other Gulf states. The reserves were discovered at four fields, but in massive quantities at the Sabriya and Um Niga fields. Taken together, the finds equal — in geographical size at least — Kuwait’s largest oilfield, the Greater Burgan field. “We have found... for the first time in Kuwait very encouraging quantities of [free] gas,” announced Energy Minister Sheikh Ahmad Fahd Al-Sabah, who also said 60% to 70% of the reserves were recoverable. “We can now say that Kuwait has entered the gas sector as a gas producing nation,” he continued. “We can say that Kuwait has entered the world of natural gas.” The state-owned Kuwait Oil Company (KOC) revealed that the initial phases of actual natural gas production would commence by the end of next year, after completion of the necessary surface infrastructure. The emirate, which sits atop around 10% of the world’s oil reserves, currently produces just one million cubic feet of natural gas, which is used for more environmentally friendly power generation. Kuwait had entered into initial talks with a view to importing natural gas from Iran, Iraq and Qatar. The Qatari deal was halted after Saudi Arabia refused permission to lay a pipeline through its territories, whilst the emirate signed provisional agreements with Iraq to import 200 million cubic feet of gas daily, and with Iran for 300 million cubic feet. Kuwait will now review these agreements in light of the discoveries. “Initial estimates suggest we can cover Kuwait’s gas needs, especially for generating electrical power and use in petrochemical industries,” said Khaled Al-Sumaiti, deputy CEO of KOC. Additionally, KOC has uncovered large reservoirs of light crude oil in the north of the emirate. The discovery of 10 to 13 billion barrels in the Bahra and Rawdatain fields could just be the beginning, as Kuwait looks to explore the full potential of its oil reserves. “Now we are dealing with only 31 reservoirs out of 105 reservoirs in the country. We will discover more oil reserves in the future,” said Sheikh Al-Sabah. Kuwait produces mostly heavy oil, which is more difficult to refine than its lighter counterpart. He said the light oil discovery would add 10% to the country’s oil reserves, which he estimated at around 90 billion barrels.

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