Kuwait’s KPC and Qatar Energy Seal VLSFO Supply Agreement
1.2 Million Tonnes of VLSFO to be Supplied Annually from July 2024 to June 2025
Kuwait Petroleum Corporation (KPC) has solidified a term agreement with Qatar Energy (QE) for the supply of very-low sulphur fuel oil (VLSFO) spanning from July 2024 to June 2025. This agreement outlines the delivery of 1.2 million tonnes of VLSFO each year, translating to a consistent flow of 21,000 barrels per day. The terms of the contract were set with a premium, amounting to $8-9 per tonne, benchmarked against Singapore’s 0.5% marine fuel spot assessments.
QE has strategically expanded its bunkering facilities at the port of Ras Laffan, leveraging VLSFO sourced from Kuwait’s al-Zour refinery since the previous year. This supply primarily caters to QE’s bunkering and power generation requirements. Notably, this contract signifies the third formal term agreement KPC has secured since the commencement of operations at the al-Zour refinery in late 2022.
With the al-Zour refinery boasting a robust production capacity ranging between 11-12 million tonnes of VLSFO annually, approximately half of this output is designated for export purposes. This new agreement further cements the strategic supply relationship between KPC and QE, ensuring steady and premium-quality VLSFO supply to meet the growing demands of both entities.