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.
It 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 800 million standard cu ft per day 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 $741 million 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 per cent 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.
Dr 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."
Mark Kremin, the president and CEO of Teekay LNG Group, said: "Achieving financial close is an important milestone for the project and we congratulate the project teams on this great achievement."
"We look forward to continuing this strong partnership, including providing the project with an FSU, and ensuring this strategically important project is completed on schedule," he stated.
GIC chief executive Ibrahim Al Qadhi said: "Achieving financial close on a project of this complexity, in this market, is indeed a great achievement. We committed considerable resources and were determined to see this project completed on schedule."
"This project highlights the role of GIC in developing pioneering and commercially viable infrastructure projects that are essential for the development of the GCC economies, he added.
Samsung CEO Shin Kim said: "It is our great pleasure to achieve financial close on this strategic project, which is an important milestone for the energy-related industries of Bahrain."
"We will continue to cooperate closely with our partner shareholders and devote our resources to ensure the success of the Bahrain LNG project," he added.