Wired News - Kuwait Petroleum and Shell Sign Agreement for Long-Term Supply of LNG to Meet Domestic Energy Needs
Back to Newsroom
Mentioned in this Article

Wired News - Kuwait Petroleum and Shell Sign Agreement for Long-Term Supply of LNG to Meet Domestic Energy Needs

Wednesday, December 27, 2017 7:30 AM
Share this article now
Active-Investors

LONDON, UK / ACCESSWIRE / December 27, 2017 / Active-Investors.com has just released a free research report on Royal Dutch Shell PLC (NYSE: RDS-A) (NYSE: RDS-B). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=RDS-A as the Company's latest news hit the wire. On December 24, 2017, Kuwait Petroleum Corp. (KPC) announced that it has signed an agreement with Royal Dutch Shell PLC (NYSE: RDS-A) (NYSE: RDS-B) for the long-term supply of liquified natural gas (LNG). KPC plans to use the imported LNG to meet the domestic energy demands. Register today and get access to over 1000 Free Research Reports by joining our site below:

www.active-investors.com/registration-sg

Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Royal Dutch Shell most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

www.active-investors.com/registration-sg/?symbol=RDS-A

Details of the Deal

The LNG supply agreement has been signed by KPC with Shell International Trading Middle East Ltd, Shell Global's Kuwait unit. The agreement is for the duration of 15 years and actual supply will start in FY20. KPC has an existing LNG supply agreement with Shell which expires in 2020. Under this agreement Shell could supply 2 million to 3 million metric tons of LNG annually, but the exact quantity has not been disclosed by either company. According to a confidential source from the Company, the price of LNG under this contract has been fixed at 11% below a Brent benchmark. However, this has not been officially confirmed. The financial details and other terms of the agreement have also not been shared any of the concerned companies. The LNG sourced from Shell will be used to power the country's power stations.

Backdrop

Shell and KPC have been working together for a long time and Shell has been supplying super-cooled fuel since 2010. Kuwait has also been moving towards clean energy sources to meet its energy demands so that it can reduce emissions and improve quality of local air.

The Company has been increasingly looking at natural gas as a viable energy option and has been making efforts to increase its production capacity. LNG is being looked at as an energy source that could help meet Kuwait's domestic demand for power to run air conditioners during hot summer months. This will help the country to reduce the consumption of crude oil for domestic needs and the excess crude oil can be sold via exports for profit.

The Kuwait government aims to increase the domestic production of natural gas to 1 billion cubic feet per day by FY23. To reach this goal, Kuwait plans to build three early production units the last of which is expected to be commissioned in January 2018. These three facilities are expected to increase Kuwait's natural gas production to approximately 500 million cubic feet per day. Kuwait is also planning to launch two gathering centers north of Kuwait in March 2018. Kuwait is also developing the Jurassic gas fields located in north of Kuwait, which will help increase natural gas production to 1 billion cubic feet per day by 2023. Kuwait is also working on the new Zour Refinery project, which will provide LNG as fuel for the country' power plants and water desalination stations. The first phase of this project is expected to start in May 2019. Meanwhile, permanent LNG terminals are being constructed at Al-Zour facility to meet domestic energy demands. Additionally, Kuwait has also acquired oil and gas assets in Norway and Australia to increase its LNG supply from other sources.

However, Kuwait has been facing difficulties to reach its domestic LNG production targets due to frequent changes in parliament. The parliament's consent is essential for sanctioning energy projects. In November 2017 KPC cancelled tenders for the development of the Jurassic gas terminals' project. The reason for the cancellation was not disclosed. Hurdles like these have forced Kuwait to look at importing LNG to meet its domestic energy requirements. Import of LNG is also a cheaper alternative as it frees up more crude oil for exports. According to an estimate by the International Group of Liquefied Natural Gas Importers, Kuwait imported 3.49 million metric tons of LNG in 2016

About Kuwait Petroleum Corp.

KPC is a state-owned oil and gas company. The Company along with its subsidiaries is focused on petroleum exploration, production, petrochemicals, refining, marketing, and transportation.

About Shell Kuwait

Shell Kuwait is the unit of Royal Dutch Shell PLC, a global group of energy and petrochemicals companies.

Shell Kuwait has been a long-term partner of KPC. Shell has been involved in the development of Jurassic Gas project with Kuwait Oil Company (KOC) and has been supplying LNG to KPC under a supply agreement since 2010. Shell Kuwait has joint ventures with Kuwait Foreign Petroleum Exploration Company (KUFPEC) and Kuwait Petroleum International (KPI). Shell Global Solutions has been working in partnership with Kuwait National Petroleum Company (KNPC) to develop its refineries.

Stock Performance Snapshot

December 26, 2017 - At Tuesday's closing bell, Royal Dutch Shell's stock advanced 1.20%, ending the trading session at $66.54.

Volume traded for the day: 1.44 million shares.

Stock performance in the last month - up 6.57%; previous three-month period - up 10.68%; past twelve-month period - up 22.97%; and year-to-date - up 22.36%

After yesterday's close, Royal Dutch Shell's market cap was at $276.76 billion.

Price to Earnings (P/E) ratio was at 25.67.

The stock has a dividend yield of 5.65%.

The stock is part of the Basic Materials sector, categorized under the Major Integrated Oil & Gas industry. This sector was up 0.9% at the end of the session.

Active-Investors:

Active-Investors (A-I) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and Canadian stocks. A-I has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

A-I has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third-party research service company (the "Reviewer") represented by a credentialed financial analyst [for further information on analyst credentials, please email [email protected]. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by A-I. A-I is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

A-I, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. A-I, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, A-I, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither A-I nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://active-investors.com/legal-disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: [email protected]

Phone number: 73 29 92 6381

Office Address: 6, Jalan Kia Peng, Kuala Lumpur, 50450 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur, Malaysia

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active-Investors

Back to Newsroom
Copyright 2022 © ACCESSWIRE. All rights reserved. Privacy Policy  |   Terms and Conditions