The Kingdom of Bahrain is constructing a permanent liquefied natural gas (LNG) import terminal, which is due for commissioning in 2019.
The 4.1bn cubic metres per year (bcma) facility is a microcosm of the shifting trends in gas supply and demand dynamics, particularly in the Middle East, demonstrating the region’s commitment to tackling energy security at a time when supplies are struggling to keep pace with growing demand.
Consisting of a floating storage unit (FSU), the new terminal offers the kingdom the flexibility to cater to seasonal demand, as well as the option to re-export to regional demand centres.
Bahrain LNG is to be developed on a public-private partnership (PPP) basis, which includes a combination of equity and debt through a consortium of regional and international banks. This represents a shift away from traditional government funding methods, and the decision to develop the project on a PPP basis will enable Bahrain LNG to utilise the expertise of the private sector and secure the financing needed to carry out the project.
The project is owned jointly by Bahrain’s oil and gas investment arm, Nogaholding, and a consortium consisting of Teekay LNG, Gulf Investment Corporation (GIC), and Samsung C&T. A syndicate of nine international and regional banks is participating in the $741mn loan, including the Arab Petroleum Investments Corporation (APICORP), with Korea Trade Insurance Corporation (K-Sure) providing commercial and political risk cover for approximately 80% of the financing.
