Bahrain seeks more gas as it plans first LNG unit

By Wael Mahdi
Bloomberg News

Bahrain plans to boost output of natural gas by tapping deep reserves and build a terminal to import liquefied gas, the head of its state-owned energy investment holding company said.

The Persian Gulf emirate can produce as much as 2.5 billion cubic feet a day of gas and wants to expand capacity further, Mohamed bin Khalifa Al-Khalifa, chief executive officer of Oil and Gas Holding Co., said in an interview. It currently pumps 1.5 billion cubic feet a day at its Bahrain field, he said. The island nation will select a builder this year for a $500 million liquefied natural gas terminal to process as much as 500 million cubic feet a day of imported fuel, Al-Khalifa said.

“We might not need to import gas now, but we want to make sure the facility is ready once we see a need to start importing,” he said in Kuwait City on March 25. “We want to build this as fast as possible for gas-security reasons.”

Water shortage: Saudi Arabia’s shale plans may be slowed

Bahrain, the smallest and oldest Arab crude producer in the Gulf, wants to increase gas output to supply fuel for manufacturers such as aluminum that are helping to diversify its oil-dependent economy. Aluminium Bahrain BSC, one of the country’s largest industrial consumers of gas, said in February that it’s moving ahead with a planned $2.5 billion expansion to add a sixth pot line, or production unit.

Terminal Location

The kingdom will decide this year whether to own and operate the planned LNG terminal or let investors do so instead, said Al-Khalifa, CEO of the company known as Nogaholding. Bahrain is considering whether to build the plant onshore or make it a floating facility, he said.

Excelerate Energy LLC is a possible partner in the project, and Nogaholding has been in talks with the trading units of Royal Dutch Shell Plc and Vitol Group regarding fuel supply.

Occidental Petroleum Corp. will drill a first well next year to search for gas at a depth of 16,000 feet (4,880 meters) to 18,000 feet, Al-Khalifa said. That’s twice as deep as some of the gas reservoirs under production at the Bahrain field, according to the website of Tatweer Petroleum, Nogaholding’s joint venture with Occidental that operates the field.

Offshore discoveries: Israel faces geopolitical tangle with natural gas

“I’m very optimistic about the deep gas,” he said.

Bahrain, which began pumping crude in the early 1930s, depends on Saudi Arabia, the world’s largest oil exporter, for supplies of 150,000 barrels of medium-grade crude from a shared field called Abu Sa’afa. It sells this crude directly to the international market.

The nation also imports about 260,000 barrels a day of lighter oil from Saudi Arabian Oil Co., or Saudi Aramco, by pipeline to feed its sole refinery, Al-Khalifa said.