His Excellency Shaikh Mohammed bin Khalifa
Al-Khalifa, Minister of Oil, met with the shareholders in Bahrain Liquefied
Natural Gas (LNG) Company in a ceremony held Wednesday evening 18 January 2017
at the Four Season Hotel in Bahrain. The company was founded in the year 2015
by the following agencies: the Oil and Gas Holding Company, with a 30 percent
equity, Teekay Company of Canada, with a 30% equity, Samsung C & T Company of South Korea, with a 20%
equity and the Gulf Investment of Kuwait with a 20% equity. The event was
attended by the consulting and implementation companies, the financers of the
liquefied gas terminal and a large number of officials in the oil and gas
sector.
His Excellency the Minister further stated
that the liquefied natural gas terminal will serve as one of the vital
cornerstones for the energy in the Kingdom of Bahrain as it will stream all of
the gas supplies needed to keep pace with the increase in the demand for
natural gas to feedstock the major industrial projects with fuel, in addition
to cogenerate energy, water desalinate and develop enhanced oil extraction
processes. This project is regarded as a secure supply of gas for the Kingdom
in case of possible shortfalls. It will enable the Kingdom to supplement the
shortage in domestic gas supplies by using liquefied natural gas.
His Excellency further disclosed that the
Kingdom of Bahrain has not started buying gas from abroad as this requires completion of the liquefied gas terminal and
that the National Oil and Gas Authority is in the process of forming a task
force to consider and explore the best ways and means to import gas two years
after completion of the liquefied gas terminal project. The gas price
calculation method will require a review after completion of the project
whereby gas will be purchased from abroad to meet the growing demands of the
private and government sectors for gas. The local prices employ a fixed bracket
for the consumer with no changes. However, this pricing method will be changed
in the future since gas will then be bought based on the market price and in
case of long term contracts the price will be linked to the oil prices.
The project will consist of a floating storage
unit, a harbour, a marine water breaker
for delivery of liquefied natural gas, a nearby platform for evaporation
re-gasification of the liquefied natural gas to its gaseous state, underwater
pipelines for delivery of the gas from the platform to the shore, an onshore
facility for delivery of gas, in addition to an onshore nitrogen production
facility. The project's capacity will be 800 million standard cubic foot per
day. Once the project is completed at the beginning of 2019, a 20 year old
agreement will enter into effect.
Bahrain LNG Company, the owner and developer
of the first terminal for importation and transfer of gas in the Middle East,
has chosen GS Engineering and Construction Company of Korea to be in charge of
the engineering, procurement and construction of the project. Meanwhile, Teekay LNG and a consortium of companies will supply a floating storage vessel for the joint project in
accordance with a fixed 20 year lease contract. Upon expiration of the
contract, assets will be conveyed to the Government of the Kingdom of Bahrain
(based on BOOT model).
