Market Trends of Kuwait Power Industry
This section covers the major market trends shaping the Kuwait Power Market according to our research experts:
Natural Gas to be the Fastest Growing Market
- Kuwait plans to substitute natural gas for oil in the power generation sector, with an aim to address the government's plant for climate change and also to retain oil-export revenues for savings and investment within the country. Therefore, natural gas is expected to be the fastest-growing segment during the forecast period for Kuwait's power market.
- According to UNDP, Kuwait's natural gas production is expected to grow from 17.4 billion cubic meters to 27.3 billion cubic meters in 2035. Moreover, Kuwait is favoring the use of natural gas in combined-cycle and steam plants for power generation and increasing share of natural gas-fired power plants with upcoming projects that are likely to bolster the natural gas segment in the upcoming years.
- Moreover, Kuwait uses electricity for water desalination and petrochemical production, as well as for enhanced oil recovery techniques for boosting oil production and being reliant on LNG imports to meet the demand. Therefore, natural gas is being used to meet most of the water desalination process.
- Moreover, with natural gas being a clean source of energy and with the government's target to reduce emissions from power generation, natural gas increased its share from 40% in 2005 to more than 47% in 2018.
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Ambitious Oil and Gas Production Targets Driving the Market
- Kuwait has planned to invest over USD 100 billion between 2018 and 2023 in the oil and gas industry to boost production. These investments are majorly done, in order, to increase the crude production capacity from the current levels of crude oil and natural gas production.
- Moreover, for the natural gas, Kuwait will increase production from 200 million billion cubic feet (bcf) per day to several folds by 2025 and beyond.
- At present, nearly all of Kuwait's crude oil production comes from onshore fields, but there are also active attempts to expand offshore production capacity. New investments are expected to be done in offshore oil and gas exploration and production in the coming years.
- Also, Kuwait has begun chemical injection into a heavy oil field in the north of the country. The enhanced oil recovery (EOR) technique, which improves the mobility of residual oil through the reservoir, is the first of its kind to be applied in the Middle East and will attract investments by many oil and gas companies.
- Therefore, the above-mentioned factors are expected to increase the production and drive the power market during the forecast period.
