Bahrain will start the development of its tight gas reserves this year, the country's minister of oil said yesterday, even as the country prepares to bring
online a liquefied natural gas import terminal in 2019 to meet its rising domestic demand.
"We have tight gas development now, we are doing [pre-development] work," Sheikh Mohammed bin Khalifa Al Khalifa said in Abu Dhabi.
“We’re in talks with service companies, Schlumberger, Halliburton, etc but eventually we will also look at IOCs [international oil companies],” he said.
Bahrain has “large” tight gas deposits within the onshore Khuff reservoirs, said Sheikh Mohammed , declining to give further details.
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Bahrain is one of the smallest producers of hydrocarbons in the Middle East, despite being the site for the first oilfield to be discovered in the region. Much of its production, which averages 210,000 barrels per day, comes from the offshore Abu Safah field, which it shares with Saudi Arabia.
The development of its own gas resources comes alongside the construction of an LNG import facility, with a capacity of 800 million cubic feet a day, expected to help meet the country's growing industrial demand for gas.
Sheikh Mohammed said the plant could also extend supply to neighbouring Saudi Arabia if the country connects to a developing regional gas connection grid.
“The [regional] power grid was successful,” he said, referring to the GCC Interconnection Grid, which connects the power networks of the bloc’s six member states.
“We are thinking of having a gas grid as well. We already have Oman, UAE and Qatar. Bahrain, Kuwait and Saudi completes [the network],” added Sheikh Mohammed.
Saudi Arabia, the world’s largest exporter of oil, currently does not import gas, but has invited interest from US Gulf Coast gas suppliers to meet growing domestic demand for power requirements.
Bahrain’s linkages with a regional network would be more for “security of supply” rather than cost-competitiveness with other LNG supply, Sheikh Mohammed added.
“Initially the discussion was based on security of supply like the power grid, which was not based on economics in any case but [is] more strategic,” he said.
Bahrain's LNG import terminal, to be managed by state-owned Nogaholding, is set for completion in 2019. The country will join Sharjah in opening up its ports next year for importing LNG from global gas markets.
Bahrain is also pushing ahead with the expansion of its refinery at Sitrah, with plans to develop an aromatics facility in a joint venture between Bahrain Petroleum Company and Kuwait’s Petrochemical Industries Corporation.
Work is already under way on the aromatics project, with front end and engineering and design work already
completed, according to Sheikh Mohammed.
“We’ll have to focus on getting resources. It’s world scale aromatics, it’s a good time to build, the capital costs are competitive, the economics are good,” he said.
Bahrain will also look for more partners to develop the historic Bahrain oilfield, which was exited by a Mubadala and Occidental Petroleum in 2016 “when the time is right”, he said.