CEOs, Company executives,
Honorable guests, Ladies and gentlemen,
On behalf of H.E. the Minister of Oil and Chairman of Kuwait Petroleum Corporation, Dr. Mohammad AlFares, it is my great pleasure to welcome you in the State of Kuwait, for the 28th edition of the Annual Conference & Exhibition of the Gas Processing Association, GCC Chapter.
We have seen over the past two years how the Oil and Gas Industry reacted through dramatic fluctuations. The COVID-19 pandemic drastically impacted our lives and every aspect of the global economy. Lower energy demand caused by the lockdowns led to a drop in oil and gas prices that reached historic lows. In turn, major industry players responded by sharply cutting their capital and operating budgets in a struggle to stabilize cash flows. CAPEX cuts ranged from 10 to 80% while OPEX was slashed by up to 30%.
Then, as the world was slowly recovering from the pandemic, and energy demand was gradually restoring, “gas security" emerged in the headlines once again as a result of the conflict in Europe and the cuts in gas supply associated with it. The reaction of European gas consumers to the shortage of supply, and the resultant ten-fold surge in gas prices, proved without a doubt how much the world relies on natural gas as a clean source for power generation and heating.
This brings us to the theme of our conference this year, “Natural Gas Value Chain – Opportunities and Challenges".
One of the major challenges facing the gas industry today is the unpredictability of both supply and demand, particularly in light of the possible economic downturn and the rapidly changing geopolitical balances.
In addition, although the natural gas industry is growing, it faces increasing competition from the global shift towards renewables. This shift is another major challenge that this conference will have to address. Of course, traditional physical challenges facing the gas industry in terms of geology, transportation and distribution, as well as the safety and integrity of the gas infrastructure, continue to be paramount.
The opportunities, however, are vast. With gas widely recognized as an important transition fuel in the energy transition, we have the chance to cement this role for clean-burning gas for decades to come.
These are some of the variables that this conference should address if we as gas producers want to remain competitive into the future. The uncertainties, to be sure, make decisions for new investments complex, giving rise to the need for advancing and finding more opportunities for process improvements. Therefore, adopting to efficient, up-to-date processes and pushing for operational excellence is crucial if we want to overcome these challenges.
The Kuwaiti Oil sector is playing a vital role toward achieving the New Kuwait Vision 2035, which aims to transform our country into a financial and trade hub, by providing the necessary cleaner energy to fuel the growth of our economy and infrastructure.
Kuwait realized the importance of natural gas as a major element in its fuel mix for power generation, as well as a primary feedstock to its petrochemical industries. To that end, we took further steps to upgrade our gas infrastructure, including upstream production facilities for associated and free gas, along with gas treatment facilities. We have commissioned one of the largest LNG import facilities in the world with a capacity of 3 billion SCF per day, and built a comprehensive cross-country fuel gas network for domestic consumption.
Moreover, our commitment to the Paris Agreement and our aspiration to create cleaner environmental conditions make it imperative to rely more on gas as a predominant fuel source for power generation. We are focusing on implementing the right technologies to improve the reliability and energy efficiency of our gas processing facilities and infrastructure, thus reducing GHG emissions.
Finally, I hope you find this conference and the program an excellent platform to bring together the best talents in the GCC to discuss the Gas industry, and to share knowledge and best practices that will add value to our businesses.
As I close, I express my sincere appreciation to the organizers of this event and their efforts to make this conference a success.