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Kuwait gas project receives regulatory approval

26 February 2026

 

Kuwait’s Central Agency for Public Tenders (Capt) has approved the planned tender of a contract for a project to add a natural gas reliquefaction unit to Kuwait’s permanent liquefied natural gas (LNG) import facility, according to industry sources.

The client on the project is state-owned Kuwait Integrated Petroleum Industries Company (Kipic).

One source said: “The invitation to bid on the project is likely to be issued in the near future.”

The contract is estimated to be worth between KD30m ($98m) and KD40m ($130m).

Kipic’s board of directors approved the final investment decision (FID) for the project in January last year.

The front-end engineering and design (feed) study for the project was completed in November 2024, according to Kipic.

This project is being developed to eliminate the flaring of boil-off gas (BOG) that occurs when supply rates from LNG import facilities drop below minimum design thresholds.

The new unit will reliquefy natural gas through cooling processes and return it to storage tanks in liquid form.

Project phases

KPC previously decided that this project would be implemented in two phases:

Phase one: This initial stage utilises LNG as the primary alternative feedstock for hydrogen production units

Phase two: The second stage incorporates fuel gas alongside LNG as an additional alternative feedstock

The second phase is expected to be implemented independently at a later date through a separate engineering, procurement and construction contract.

Kipic said: “This phased approach was adopted to reduce capital expenditures.

“The project consultant was instructed to review the preliminary engineering designs (pre-feed) with phase one outcomes in mind.”

Project scope

The scope of the phase one contract will include engineering, procurement, construction, pre-commissioning, commissioning, start-up and performance testing.

BOG refers to the portion of LNG that evaporates into gas during unloading and storage.

Some LNG facilities flare this gas, which has negative environmental consequences and prevents it from being transported to end users.

Reliquefying the BOG means that flaring can be reduced and a larger percentage of the imported gas can be transported to end users.

Aside from covering the development of the reliquification facility, the package will also cover associated works at the LNG import terminal.

The package is expected to take 20 months to execute.

It was originally scheduled to be tendered in December last year, but it has seen some delays. It is not clear why the project has been delayed.

Kuwait’s $2.9bn Al-Zour LNG import terminal received its first cargo of gas from Qatar in July 2021.

The terminal, which is operated by Kipic, is located about 16 kilometres from Kuwait’s border with Saudi Arabia and is designed to import up to 22 million tonnes of super-chilled gas each year, making it the largest terminal of its kind in the Middle East.

It is the country’s first permanent facility to import LNG. Prior to the facility starting operations, Kuwait mostly imported LNG via floating storage and regasification units.

Kuwait, one of Opec’s largest oil producers, needs to buy LNG from abroad since it pumps little gas of its own. The crude diverted from power plants is likely to be exported.

The country has a 15-year contract with state-owned Qatar Petroleum to buy 3 million tonnes of LNG a year for the Al-Zour facility.

The main contract for the LNG terminal was awarded in 2016 to a consortium of South Korea’s Hyundai Engineering Company, Hyundai Engineering & Construction Company and Korea Gas Corporation, for $2.93bn.

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Wil Crisp

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