Bahrain LNG set to start work on giant terminal
, January 8th, 2017
Bahrain LNG, developer and owner of the kingdom’s first receiving and regasification terminal for liquefied natural gas (LNG), will start the construction work on its new terminal this month and complete it by 2019.
The company is jointly owned by the Oil and Gas Holding Company (nogaholding) and a consortium consisting of Teekay LNG Partners, Gulf Investment Corporation (GIC) and Samsung C&T (Samsung).
On completion, the terminal will have a capacity of 800mn standard cubic feet per day (mcf/d) and be operated under a 20-year agreement.
It will comprise a floating storage unit (FSU), an offshore LNG receiving jetty and breakwater, an adjacent regasification platform, subsea gas pipelines from the platform to shore, an onshore gas receiving facility, and an onshore nitrogen production facility.
The project was awarded to the Teekay LNG-GIC-Samsung consortium in December 2015 by the National Oil & Gas Authority (Noga) of Bahrain following an international competitive tendering process.
On the ambitious project, Shaikh Mohamed bin Khalifa Al Khalifa, Minister of Oil, said, "The Bahrain LNG import terminal is a key component of our plans for the further expansion of the energy and related sectors of the Kingdom of Bahrain."
The project is being developed to supplement local gas production in Bahrain and ensure capacity to meet peak seasonal gas demand and industrial growth. It will also enable the country to procure internationally-traded LNG on a competitive basis.
Bahrain LNG said the terminal will form a vital part of the energy infrastructure of Bahrain – it will give the country the security of energy supply that it needs to meet its growth in demand for natural gas; to fuel large industrial projects, to generate power and water, and for enhanced oil recovery.
The company has sealed a $741mn loan for the platform’s construction with a syndicate of nine international and regional banks.
The loan has a tenor of 20 years, and Korea’s export credit agency Korea Trade Insurance Corporation (K-sure) provided commercial and political risk cover for about 80% of the financing.
Standard Chartered, Arab Petroleum Investments Corporation and the Korea Development Bank acted as lead banks. The syndicate also includes Ahli United Bank, Santander, Crédit Agricole, ING Bank, Natixis and Société Générale.
Bahrain LNG said the engineering, procurement and construction (EPC) contract was awarded to GS Engineering & Construction, while Teekay LNG was signed up for supply of the FSU which will be modified specifically for this project, through a 20-year time-charter agreement.
"The achievement of financial close is a critical milestone in the continued development of the Bahrain LNG import terminal project and we congratulate the sponsors, their supporting lenders and K-Sure on their achievement after many months of sustained effort," stated Shaikh Mohamed.
Dafer Al Jalahma, the CEO of nogaholding, said, "It is encouraging to see the successful closing of the financing for the project, and for the strong support shown by lenders and K-Sure that resulted in the attractive terms achieved."