Bahrain Petroleum Company’s (Bapco) is considering financing about $3bn-4bn of its $5.5bn modernisation programme with export credit agencies (ECAs), according to sources close to the project.

ECAs - which are public lending institutions providing government-backed loans and guarantees - have become a popular form of financing in Bahrain, where liquidity has been tight because of low oil revenues.

Aluminium Bahrain recently said it was seeking $1bn commitments from ECAs to expand its Line 6 project, which will boost production capacity by 540,000 tonnes a year (t/y) to 1.5 million t/y.

Sources informed MEED that Bapco’s expansion of its Sitra refinery is currently holding clarification talks with shortlisted contractors.

Financing of the project to expand capacity of the 267,000 barrel-a-day refinery to 360,000 b/d by 2020 will most likely rely on South Korean and Japanese ECAs, according to a source.

Award of the project is expected to be in tandem with financial close, which MEED understands will be in the third quarter of 2017. French bank BNP Paribas and the UK’s HSBC are financial advisors on the project.

Bidding groups called in for clarification talks are:

• JGC (Japan)/GS Engineering and Construction (South Korea) JV
• Technip (France)/ Tecnicas Reunidas (Spain)/ Samsung Engineering (South Korea) JV
• Fluor (US) Hyundai EC (South Korea)/ Daewoo EC (South Korea) JV
• CB&I (US)/ Petrofac (UK)/ Mitsui (Japan) JV

Bahrain was the first in the Gulf to discover oil in 1932, but also the earliest to see its fields mature. The small Opec producer shares the large Abu Safa oil field with oil-rich neighbour Saudi Arabia and despite early diversification efforts, oil still forms 70 per cent of its government revenues.