News
& Events

Petroleum Corporation: the unpredictability of supply and demand is a major challenge facing the gas industry

18-09-2022

The CEO of Kuwait Petroleum Corporation, Sheikh Nawaf Saud Al-Nasser Al-Sabah, said today, Sunday, that the unpredictability of supply and demand is one of the most important challenges facing the gas industry, especially in light of the potential economic downturn and rapidly changing geopolitical balances. This came in a speech by Sheikh Nawaf Al-Sabah during the opening of the 28th session of the Conference and Exhibition of the Gas Manufacturers Association of the Gulf Cooperation Council, which comes under the title (Opportunities and Challenges in the Natural Gas Value Chain). He added that despite the growth of the natural gas industry, it is facing increasing competition from the global shift towards renewable energy sources, "and this transformation is another major challenge that must be dealt with seriously." He stated that other known challenges facing the gas industry still exist in terms of exploration and development of gas fields, means of gas transportation and distribution, as well as measures to ensure the safety and viability of gas infrastructure, which are challenges of paramount importance. He pointed out that the oil and gas sector was negatively affected as a result of the fluctuations caused by the Corona virus pandemic and the accompanying closures and ban measures, as oil and gas prices reached their lowest historical levels, which prompted oil and gas companies to take fateful decisions and sharply reduce capital and operating expenses in order to achieve a kind of financial stability. He stated that the world is recovering "slowly" from the epidemic and the level of demand for energy has begun to gradually rise in conjunction with the interruption of gas supplies in Europe due to the Russian-Ukrainian crisis, noting that the reaction of gas consumers in Europe to the lack of supplies and the huge rise in gas prices proved the extent of the world's dependence on Natural gas as a clean source for power generation and heating. He pointed to the importance of natural gas as a major component of the fuel mix for power generation in addition to its importance as a raw material for petrochemical industries, indicating that to this end, further steps were taken to modernize the gas infrastructure, including the development of associated and free gas production facilities and gas processing facilities. He said that one of the largest import facilities for liquefied natural gas in the world with a capacity of three billion cubic feet was established and a comprehensive fuel gas network was built across the country for local consumption. He noted the role of the oil sector in achieving the (New Kuwait Vision 2035), which aims to transform Kuwait into a financial and commercial center by providing clean energy necessary for the growth of the national economy and infrastructure. For his part, the Acting CEO of the Kuwait Oil Company, Khaled Al-Otaibi, said in a similar speech that the demand for oil and gas has returned to levels before the Corona (Covid-19) pandemic, indicating that the (Kuwait Oil Company) intends to increase its production of natural gas in line with the KPC’s strategy to meet Domestic demand for energy. Al-Otaibi added that the increase in production will take place mainly through the development of free gas production from the Jurassic fields, pointing out that the company signed a contract for offshore drilling and oil and gas exploration in Kuwaiti territorial waters, which is one of the most important projects currently being implemented within the framework of the KPC strategy for the year 2040. For his part, the head of the Gas Manufacturers Association, the Gulf Cooperation Council Branch, Hamad Al-Zuwair, said in his speech that this conference was scheduled to be held in March 2020, the same month in which the World Health Organization declared a health emergency as a result of the (Covid-19) epidemic, so the association resorted to virtual platforms and electronically via the Internet to continue its activities. Al-Zuwer added that the alternating periodic hosting of the conference, exhibition and annual seminars proved to be an effective way to enhance technical knowledge and attract the active participation of many companies across the region and also helped encourage participation among the members of the Executive and Technical Committee of the Association to enhance their activities. The conference is held under the patronage of the Deputy Prime Minister, Minister of Oil, Minister of State for Cabinet Affairs and Acting Minister of State for National Assembly Affairs, Dr. Mohammed Al-Faris, and includes a series of specialized sessions and workshops in the presence of the most prominent stakeholders and experts in the gas industry from the region and the world, in addition to officials of oil companies. The five-day conference aims to exchange experiences, knowledge and best practices regarding the development of the gas industry regionally and globally