Kuwait Seals $3bn Natural Gas Deal with BP to Stave Off Energy Crisis

Kuwait signed a five-year deal for liquefied natural gas (LNG) with BP on Tuesday. The Kuwaiti government will pay an estimated $3bn as it aims to stave off an energy crisis in the summer months, when electricity use is at its peak.

The OPEC producer announced an agreement with Royal Dutch Shell on Sunday, who will supply Kuwait with $12bn worth of LNG over a six-year period.

Kuwait will also import gas from Qatar's state run Qatargas.

"The amount contracted by the three companies that we signed with will be up to 2.5m tonnes per year," said Nasser al-Mudhaf, head of the Kuwait Petroleum Corp.

The three companies will send 32 shipments per year, each one comprising 80,000 tonnes, Mudhaf said. Shell will send 18 shipments, Qatargas will send eight and BP will send six, he added.

Kuwait first imported LNG in 2009. The frozen gas shipments are vital to supply its power grid, especially during the scorching summer months when air conditioning use is at its peak.

Since 2009, Kuwait has done supply deals with Shell and the Swiss-based trader Vitol for the peak power demand months from April to October.