Bahrain is to expand the capacity of its sole refinery by up to 200,000 barrels a day (b/d) over the next 20 years to handle fresh supplies of oil from Saudi Arabia.

Oil & Gas Affairs Minister Abdul Hussain Mirza says Bahrain is seeking to expand capacity at the refinery at its Sitra oil field to up to 470,000 b/d from 270,000 b/d.

Bahrain Petroleum Company (Bapco) is drawing up a master-plan for the upgrade with the US’ Chevron Lummus Global.

Bahrainis seeking to increase the Sitra refinery’s production by securing new oil supplies from state-owned energy giant Saudi Aramco, but also by developing fresh oil finds and  reserves at the oil field.

Aramco currently supplies 230,000 b/d of oil to the refinery via a pipeline running from Abqaiq in Saudi Arabia via Dhahran to Sitra.

Mirza says Bapco and Aramco completed a prefeasibility study in 2008 for a larger pipeline capable of transporting 350,000 b/d from Saudi Arabia to Bahrain.

One source close to the project says the planned 115-kilometre-long pipeline will run directly from Abqaiq to Sitra.

Bapco will tender the front-end engineering and design (Feed) contract for the new pipeline in 2010, says Mirza.

The Oil & Gas Affairs Ministry has created a joint venture company, Tatweer Petrol-eum, to increase production from the Sitra oil field. The joint venture comprises state-run National Oil & Gas Authority (Noga), US oil company Occidental Petroleum and Abu Dhabi sovereign wealth fund Mubadala Development Company.

“The joint venture has been approved by parliament and work will start by the end of the year,” says Mirza. “Over a 20-year period, [oil] production [at the Sitra field] could triple to 100,000 b/d [from 35,000 b/d currently].

Rising domestic demand has put pressure on the ministry to increase oil production. Noga estimates that domestic demand for oil will increase by at least 3 per cent a year to 45,000 b/d by 2011.