Kuwait buys stake in Shell’s Australian gas operations
Kuwait is buying a US$1.14bn stake in the Australian natural gas operations of Royal Dutch Shell.
The Kuwait Foreign Petroleum Exploration Company (KUFPEC) will buy Shell’s 8% equity interest in the Wheatstone Iago gasfield and its 6.4% stake in the Wheatstone liquefied natural gas (LNG) project in Western Australia for US$1.14bn, Shell announced on January 20th. The Chevron-operated Wheatstone LNG development (in which KUFPEC was already a joint venture partner) is scheduled to produce its first LNG shipment in 2016.
Although Japan and Korea have signed LNG sales contracts for the first phase of the project, not all output appears to have been sold. KUFPEC’s investment is likely to be part of a Kuwaiti strategy to gain access to LNG on more favourable terms and to improve its supply position. The deal should support Kuwait’s drive to alleviate the difficulties it faces in plugging gas shortages and reducing domestic use of oil for power generation.
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