The Kuwaiti government has green lit development of the second phase of the North Kuwait Jurassic Gas project, which will help meet the country’s domestic gas demand, according to local sources.

The Kuwait Oil Co. (KOC) plans to tender the 1.2 billion Kuwaiti dinars (US$4 billion) project in early 2018. 

KOC is relying on exploration to find fields that will produce 28 MMcm/d ( 1 Bcf/d) of gas to reach its target of 113 MMcm/d (4 Bcf/d) by 2020, including 71 MMcm/d (2.5 Bcf/d) of non-associated gas.

The company started free gas production from its Jurassic sour gas field in May 2008 with commissioning of the Early Production Facility EPF-50. The field produces sour gas and light crude from a deep HP/HT naturally fractured carbonate reservoir of low permeability and low porosity. The reservoirs contain a variety of hydrocarbon fluids ranging from black oil to gas condensate with sour gas. Typical per well production rates are up to 5,000 barrels of oil or condensate per day and 10 million standard cubic feet per day, making them an excellent commercial success, according to KOC’s officials.

Over the last decade, exploration activity targeting Jurassic carbonate reservoirs in North Kuwait has culminated in the discovery of six major tight gas fields, encompassing an area of about 1,800 sq km (695 sq miles) with a reservoir gross thickness of about 671 m (2,200 ft).

KOC produces 6 MMcm/d (210 MMcf/d) of free gas from North Kuwait and plans to increase production to about 14 MMcm/d (500 MMcf/d) by the year-end, according to KOC CEO Jamal Jafaar. “We are implementing a plan to expedite the development of north Kuwait’s Jurassic gas reserves, and we are expecting the non-associated gas production from this to increase to about 500 MMscf/d, which will be in addition to the associated gas production of 1.5 Bscf/d.”

The project comes as part of KOC’s 2030 Upstream Strategic Objective, which seeks to optimize Kuwait’s production and utilization of associated gas and maximize production of non-associated gas to support domestic energy needs. The oil and gas fields in Kuwait are split into four main parts: North Field (North Kuwait), West Field, South Field and East Field.

Earlier in August, Kuwait Oil Minister Essam al-Marzouq said the country also aims to meet part of the country’s gas demand with resources from the Dorra gas field, which is jointly shared by Kuwait, Saudi Arabia and Iran.

The move is part of Kuwait’s drive to boost its non-associated gas production to reduce dependence on associated output and imported LNG.  Kuwait’s LNG imports have recently been buoyed by an influx of Qatari cargoes. It also comes as Kuwait faces a huge gas shortage due to high local consumption and competition between power generation and petrochemical companies. Current associated gas production in Kuwait is about 31 MMcm (1.1 Bcf), while free gas is about  5 MMcm (179 MMcf), which doesn’t meet the local consumption.

Kuwait signed in March 2016 a $2.93 billion contract with three South Korean firms—including Hyundai Engineering Co., Hyundai Engineering & Construction Co. and Korea Gas Corp.—for the construction of an LNG import terminal at al-Zour, which is near the border with Saudi Arabia. The development will include a regasification facility and eight LNG storage tanks.

The LNG terminal is set to be completed in first-quarter 2021 and highlights the intention of state oil firm Kuwait Petroleum Corp. (KPC) to move from short-term supply deals to contracts of up to 15 years and involving 6 million to 7 million tons of imported LNG annually after 2020. KPC recently signed contracts with three LNG suppliers to provide 2.5 million tons of gas to Kuwait to meet the country’s needs through 2020.