Gas Stays Best Strategic Option To Work Stations’

Oil sources said despite the continued rise in global gas prices to $25 in Asia per million British thermal units (btu), compared to the price of two dollars a month ago, in light of many factors, gas will remain the best strategic option for Kuwait, whether economically or environmentally to operate power stations. The sources told Al-Rai that the increase in prices only reduces the profitability difference between selling products and importing gas, explaining that the gas pricing equation represents 11% of the price of Brent crude, but the prices of sales contracts are lower in long-term contracts than the announced price.

The sources stressed that “even with the high announced prices, gas remains the best option, as the cost of burning oil products to operate power stations is much higher than gas prices, even after the rise in gas price, as the sale of these products achieves higher returns than gas prices,” noting that “the KPC has signed a 15-year contract with the Qatar Petroleum Company to import 3 million tons/year of liquefied natural gas, through the Al-Zour port — a contract that will ensure Kuwait’s needs are met in future.

The source added “Kuwait’s production of gas associated with oil production is estimated at 1.2 billion cubic feet, while the production of free gas is between 400 and 440 million cubic feet of gas per day,” noting that “reducing the cost of fuel used in power plants, when importing the necessary quantities of liquefied natural gas to replace gas oil, which contributes to reducing the cost at the level of Kuwait, at an average of 700 million dinars annually until 2040, equivalent to 2 million dinars per day.” The sources pointed out that “gas will remain the best environmental option for power and water generating plants, and reduce polluting emissions, including carbon dioxide emissions, in addition to improving operating efficiency and reducing maintenance costs for gas turbine generators in the combined cycle in power and water plants, by providing them with gas fuel instead of Gas oil”.

 

 

SOURCE  ARABTIMES

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