MEED magazine said that the Kuwait Integrated Petroleum Industries Company (KIPIC) is re-adjusting its strategy regarding the distribution process of the $16 billion Al-Zour refinery project, in order to meet the domestic demand for energy amid rising global gas prices.

Some of the storage tanks that were to be among the last parts of the project to be rolled out online have now been allocated as a high priority, and will be brought online on a fast schedule, reports a local Arabic daily.

A source said that Al-Zour Refinery exports now sells larger quantities of low-sulfur fuel oil to the local power station due to the high prices of imported gas to Kuwait.

The source added, “There was a decision to reprioritize parts of the project in order to facilitate the sale of larger quantities of low-sulfur fuel to the power plant, and some storage tanks, which were previously classified as low priority, were allocated as export tanks to the power plant and were classified now as a higher priority, exports to the domestic power plant have already become a very successful component of the project.” Note that exports to the power station started three months ago.

The MEED report indicated that a decision to rearrange priorities was taken by the operational and strategic planning units of the Kuwait Petroleum Corporation. One of the sources said: “It was always envisaged that the power plant would consume low-sulfur fuel oil from the refinery, but it was originally understood that the power plant would run mainly on gas and it would be added with low sulfur fuel oil.

Earlier in September, KOC acting CEO Khaled Al-Otaibi said the company aims to increase natural gas production to meet domestic demand. The source added: “With the world recovering from the disruptions caused by the Covid-19 pandemic, the demand for oil and gas returned to its pre-pandemic levels in 2019.

In this high-price environment, the company is determined to increase its production of natural gas in line with KPC’s strategy to meet the domestic demand for energy. In 2021, Kuwait imported over 7.7 billion cubic meters of natural gas, according to information provided by UK energy producer BP, 35.5% more than it imported the previous year.

The GCC has seen an annual growth rate in gas imports of 9.8% since 2011. With global energy prices rising in the past two months, natural gas imports have become a growing concern.

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