In early September, the US-German company, Excelerate Energy, said it had completed its first deliveries of gas to the Kuwaiti market from imported liquefied natural gas (LNG). Excelerate, a subsidiary of Germany’s RWE, had installed a floating regasification facility, known as GasPort, in Mina al-Ahmadi port. Its LNG tanker Express had delivered a shipment of 130,000 cubic metres of LNG from Australia to the facility on August 31, under the terms of a supply agreement with Royal Dutch Shell.

According to a statement by RWE, this shipment was being regasified into an equivalent of 2.8bn cubic feet of natural gas, and then being fed directly into the Kuwaiti gas grid. The shipment had been timed to coincide with peak demand in Kuwait, where air conditioner use and gas-fired electricity generation are the main drivers of consumption.

Since our last report, we have adjusted our macroeconomic forecasts for Kuwait. The global downturn is having a real impact on the country. We now expect a gross domestic product (GDP) contraction of 2.2% in 2009 (was 1% previously). We see 2010 GDP increasing by 1.8% (down from 2.1% in our previous report). For the 2009-2013 forecast period, therefore, we expect an annual average GDP growth of 1.8%, down from 7.7% in the preceding five years. The effect on our freight traffic forecasts across the two periods as a whole is therefore quite negative. However, the current wave of infrastructure investments is an important positive factor. As far as road haulage is concerned, we expect Kuwait to continue following what could be called a ‘mature economy’ pattern, where freight turnover growth lags behind GDP.

Congestion of the current motorway network and vehicle saturation are also factors to bear in mind where this is concerned. On maritime freight, despite the current market conditions, the country’s plans to boost oil exports will begin to have an impact towards the end of our forecast period. Although Kuwait has begun importing natural gas, the discovery of gas reserves also suggests that more hydrocarbons may become available for export on the long term. Our pipeline throughput estimate is intended to capture the effect of new investments in storage facilities and pipelines. In airfreight, the difficulties of the national carrier, Kuwait Airways, are high, but volumes may pick up from 2011 onwards. Considering all these factors, we now believe that freight turnover measured across road, sea and air – as expressed in million tonne-km (mntkm) – will increase by an annual average of 1.3% over the 2009-2013 forecast period. This will be on a par with growth in the wider economy.

According to our latest estimates, transport and communications (T&C) GDP rose by a strong 8.3% in 2008 – 2.1 percentage points (pps) faster than overall GDP, which we estimate to have increased by 6.2%.

For the 2009-2013 forecast period, we expect the T&C sector to continue outpacing the economy as a whole. It will achieve average annual growth of 2.2%, versus the 1.8% for overall GDP. The total value of T&C GDP will rise to US$7.98bn 5 in nominal terms by 2013, representing 5.2% of Kuwait’s GDP.

Like all Gulf Co-operation Council (GCC) states, Kuwait does not disclose statistics, other than some basic banking releases. Accordingly, it is difficult for BMI to establish solid facts relating to the transport sector. Nevertheless, in the five years to 2013, we forecast 1.1% average annual growth for road haulage, 1.3% for maritime cargo and 2.4% for airfreight. We estimate annual average pipeline throughput growth of 2.5%. We expect that the bulk of transport will continue to be carried by waterways and consist largely of oil and related goods. Transit trade, particularly that involving Iraq, will comprise raw materials involved in Iraq’s re-building (aggregates, basic metals, etc.) and machinery related to building and construction work.