The state-owned investment arm of Bahrain’s National Oil & Gas Authority (NOGA) has floated a request for proposals (RFP) for a 400 million cubic feet (mcf)/day – or 4.13 billion cubic metres (bcm)/year – LNG import project which it aims to start up in the first quarter of 2017.
The RFP was sent to selected developers capable of providing import infrastructure to be located 4km (2.5 miles) from previous plans in Khalifa Bin Salman port, NOGA Holdings portfolio manager, Hassan al-Alawi told ICIS.
The project, which can be expanded to double the import capacity depending on Bahrain’s domestic supply/demand scenario, is currently being advised by the US-based consultancy, Galway Group. The country has moved away from a previous floating storage regasification unit plan after NOGA scrapped a tender in late 2012 and the revived project now consists of a floating storage unit (FSU) and regasification on jetty. The project design is understood to be similar in scope to Malaysia’s Malacca LNG terminal, which became the first in the world with FSUs to be connected to a regasification unit on an island jetty in June 2012. The permanent Malacca FSU element consists of two converted 1981-built LNG carriers.
As project manager for the development of the Bahrain terminal, Galway’s role includes the supervision of the technical, commercial and financial aspects of the project. To this end it has developed a commercial strategy for the project, and is managing the selection process for engineering companies through to the end of the front end engineering and design phase, it said in a statement.
NOGA Holdings meanwhile expects the RFP process to take some months before it is in a position to award a contract for the import infrastructure provider. Only once this part of the development plan is complete – by the end of 2014 – will the project start its LNG procurement phase, Al-Alawi said.
The country has long considered importing gas to supplement domestic production but its plans to import up to 1 billion cubic feet (bcf)/day via a proposed pipeline from Iran have been dropped for political reasons while the prospect of building a pipeline from Qatar have also not moved since the moratorium on Qatar’s North Field.
Bahrain’s gas demand, meanwhile, has grown steadily over the past decade on the back of greater gas-fired power generation, as well increasing output from gas-hungry industries such as petrochemicals and aluminium production. The outlook for demand growth over the coming years is still 2-3%/year, according to FACTS Global Energy consultant Siamak Adibi, with another key demand centre including refineries also set to prefer gas as a feedstock over more costly fuel oils. While the upward trend in Bahrain’s domestic gas production is not expected to plateau at 14.2bcm/year – recorded for 2012 in the latest BP Statistical review – the move to revive its LNG import project does highlight the government’s concern that demand may outstrip domestic supply. A significant part of Bahrain’s production outlook is dependent on the deep Bahrain gas field being developed by US-based exploration and production company Occidental Petroleum and Abu Dhabi’s state-owned Mubadala.
The Bahrain field development is still at an early stage but there will be some more clarity on how much production can be expected by the end of next year, Adibi said. As it stands, it is unlikely that it would enable the country to meet its 2.5bcf/day domestic production target, according to Adibi.
The ability of the LNG import proposal to be expanded from 400mcf/day to 800mcf/day provides Bahrain with some security should domestic production fall short of targets. Ludovic Aldersley