Kuwait, Japan enjoy longstanding energy cooperation

Japanese Economy, Trade and Industry Minister Yukio Edano expressed gratitude to Kuwait for maintaining stable supply of crude for decades to his country. which relies on imports for virtually all of its domestic crude consumption. The Japanese minister, in a statement to KUNA, welcomed His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah's upcoming visit to Tokyo and thanked Kuwait for hosting the Ministerial Meeting of the International Energy Forum slated to March 12-14. "Under uncertainty surrounding the future of global energy situation, it is meaningful that oil producing and consuming countries will have a dialogue toward stability in world oil markets. I appreciate Kuwait for providing such an invaluable opportunity for us," said the minister. Despite gradual fall in its crude oil demand in recent years, Japan remains one of top buyers of Kuwaiti oil, with Japan-bound shipments accounting for roughly 20 percent of Kuwait's total crude exports of 1.3-1.5 million barrels per day (bpd). Last year, Kuwait's exports to the world's third-largest energy user totaled 87.05 million barrels, or 240,000 bpd. In addition to crude oil, Kuwait also enjoys steady shipments of liquefied petroleum gas (LPG) and naphtha to Japan. The first shipment of oil from state-run Kuwait Petroleum Corporation (KPC) to Japanese refiner Idemitsu Kosan Co. dates back to in 1958, even before the two countries forged diplomatic ties in 1961, while KPC established Tokyo office in 1968 as its first regional marketing office. One of KPC's noteworthy achievements last year was a landmark deal with Japan's Fuji Oil Co. in October. KPC Chief Executive Officer Farouk Al-Zanki signed the long-term crude supply contract, which he said "expected to bring in billions of dollars of revenues to the Kuwaiti treasury over the coming years." Meanwhile, Tokyo-based Arabian Oil Company, Ltd. (AOC) has maintained solid business relationships with Kuwait more than half a century. The Kuwaiti government granted a concession to AOC in 1958 to explore and develop hydrocarbon reserves in the offshore Divided Zone between Kuwait and Saudi Arabia, which resulted in discovery of the massive Khafji oil field in 1960 and the Hout oil field in 1963. Although the concession agreement expired in January 2003, AOC reached a 20-year crude oil purchasing deal in the same month, which Kuwait guarantees it the right to supply crude produced in the Khafji oil field. In addition, new types of bilateral energy cooperation have come to the fore recent years. KPC's international unit Kuwait Petroleum International (KPI) established a joint venture with Idemitsu and Mitsui Chemicals Inc. in 2008 to construct a 200,000 bpd refinery and petrochemical complex in Vietnam, which will utilize Kuwait's stable crude oil supply and Japanese firms' oil refining and petrochemical business experiences. The project, with a view to going online in 2015, marks the first-ever Kuwaiti-Japanese joint venture in building a refinery in a third country. Moreover, Kuwait Institute for Scientific Research (KISR), which was established in 1967 by AOC in fulfillment of its obligations under the oil concession agreement, currently joins hands with the Japanese team in upgrading technologies for Kuwait's heavy crude oil. Amid rising demand on the high quality oil derivatives, KISR and Japan Cooperation Center, Petroleum (JCCP) expedite technical cooperation in converting Kuwait's large quantities of high-sulfur heavy crude to more useful light, low-sulfur crude oil, based on Japan's technologies, experience and know-how on desulfurization catalysts. The two countries have also accelerated bilateral cooperation in the fields of renewable energy and energy conservation. H.H. the Amir will make a four-day visit to Japan from March 20. It will mark the first visit to Japan by a Kuwaiti ruler to Japan since 1995. H.H. the Amir last visited here in July 2004 as Prime Minister.