Manama calls for gas grid to be set up across Gulf states

30 May 2008
Bahrain government wants network to allow GGC members to pool supplies.

The Bahrain government has called for the creation of a GCC-wide gas pipeline network to allow member states to pool gas supplies for industrial users and power generation.

It comes as growth in demand for gas around the Gulf continues to outpace supply, because of the expansion and diversification of the region’s economies.

“One day we hope there will be a gas network,” Bahraini Oil & Gas Minister Abdul Hussain Ali Mirza tells MEED.

“On a strategic level, a GCC gas network similar to the GCC electricity network makes economic and political sense, so that we can leverage the benefits of GCC co-operation and ensure that GCC nations work together as one in driving the region forward.”

Gas is particularly crucial for Manama because it has very little of its own natural resources. Plans to expand Aluminium Bahrain (Alba) and the Gulf Petrochemical Industries Company (GPIC) fertiliser complex have stalled because of a lack of energy and feedstock.

A GCC network has been under discussion since the early 1990s and led to the construction of the Dolphin pipeline, linking Qatar with the UAE and Oman (see Special Report, page 55). But there are no plans to extend this network to other countries. Previous discussions to link Qatar with Bahrain stalled when it was realised that the pipeline would run through Saudi Arabian waters.

Bahrain is negotiating with Doha and Tehran to import gas directly via sub-sea pipelines.

“We have had negotiations with Qatar for some time, but they are doing a technical study of their North field, and they say as soon as that finishes, allowing them to export gas, Bahrain will be a main priority,” says Mirza.

“With Iran the talks are ongoing. In fact, there have been four meetings. Our technology team is going to Iran as part of a fifth round of negotiations to talk about the source of gas, which field it will come from and whether it will be imported on a buy-back basis. It is a matter of agreeing on technicalities. We have not reached the stage of discussing prices.”

Manama is also hoping to boost its domestic gas production, which currently stands at 1.2 billion cubic feet a day, to more than 2 billion cubic feet a day.

“We are exploring offshore and are enhancing our own [onshore] field and, at the same time, looking at energy conservation,” says Mirza. “There is also the electricity grid now, which can save us gas.”

Extra gas will be used to expand the production at the kingdom’s industrial facilities, adds Mirza.

Among the major planned projects requiring gas is a doubling of ammonia and urea production by GPIC.

The company, which is owned by the Bahrain government, Kuwait’s Petrochemical Industries Company and Saudi Basic Industries Corporation (Sabic), has conducted a feasibility study into the expansion and submitted a request to the National Oil & Gas Authority (Noga) for approval

“We have received provisional approval, subject to the availability of gas [feedstock],” says Abdulrahman Jawahery, general manager of GPIC. “A decision by Noga should be made by the end of the year.”

The gas, if allocated, will come from additional production from Bahrain’s own onshore fields.

The expansion will involve the construction of a 2,100-tonne-a-day (t/d) ammonia plant and a 3,600-t/d urea facility, almost double GPIC’s current ammonia and urea capacity of 1,200 t/d and 1,700 t/d respectively.

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