Bahrain LNG is in the process of appointing banks to arrange more than $600m of project finance for its liquefied natural gas (LNG) import terminal.

The company is aiming to reach financial close in the second quarter of 2016.

The Bahrain National Oil and Gas Authority (Noga) awarded the project to Bahrain LNG, which is a consortium of US-based Teekay LNG Partners, South Korea’s Samsung C&T and Kuwaiti group Gulf Investment Corporation (GIC).

The 800 million cubic feet a day a floating storage terminal will cost around $655m, not including the floating storage unit, project management and development, financing and other costs.

The consortium signed a build-own-operate-transfer (BOOT) contract to develop the project. The 20-year own and operate period starts in mid-2018. It is the first public private partnership (PPP) project of its type in the region.

Bahrain LNG was formed to deliver the LNG terminal. Teekay owns a 30 per cent stake, while Samsung holds 20 per cent. Equity investor GIC owns 20 per cent with state-owned Nogaholding taking the remaining 30 per cent.

Both international and local banks will be approached to support the deal, due to the small capacity of the domestic banking sector.

Nogaholding is using PPP for its gas projects as government revenues fall due to lower oil prices.

But banking sector liquidity across the GCC is also falling as lower oil prices begin to affect economies and government deposits in banks.

Banks are expected to be much more rigorous and price their lending higher in 2016.