May 8 (Bloomberg) -- Bahrain’s venture with Occidental Petroleum Corp. and Mubadala Development Co. seeks to more than triple output capacity at the island nation’s oil field, the head of the kingdom’s energy investment holding company said.
The Bahrain field, the Middle East’s oldest producing deposit, has “a lot of potential” for expansion, Mohamed bin Khalifa Al-Khalifa, chief executive officer of Nogaholding, said today at a conference. Developments to tap more of the field’s reserves are “encouraging,” he said.
Bahrain, which began pumping crude in the 1930s, is the Persian Gulf’s smallest producer. It depends on Saudi Arabia, the world’s largest oil exporter, for supplies from a shared field that are delivered to Bahrain by pipeline.
The deposit has produced about 30,000 barrels of crude a day and Tatweer Petroleum, as the joint venture is known, aims to raise output to at least 100,000 barrels a day, Al-Khalifa said at the Middle East Petroleum and Gas Conference in the Kingdom. The venture is also working to raise gas-output capacity to 2.7 billion cubic feet per day by 2024 from 1.5 billion cubic feet, Oil Minister Abdul Hussain Ali Mirza said at the same conference yesterday.
Deep Gas Reserves
Occidental is also developing a plan to tap deep gas reserves in deposits below the Bahrain field, Al-Khalifa said. To meet domestic demand until supplies from the Tatweer and Occidental projects become available, Nogaholding is developing plans for a liquefied-natural-gas receiving terminal with a capacity of 400 million standard cubic feet a day, he said.
The plan may include a floating facility and the company plans to shortlist two potential builders, he said. Excelerate Energy LLC is one possible partner for the facility and Nogaholding has been in talks with the trading units of Royal Dutch Shell Plc and Vitol Group regarding fuel supply, he said.
Gas from the plant could be used in refinery units that the state oil company plans to build to create hydrogen to turn crude residue into more valuable diesel fuel, Al-Khalifa said.
Bahrain, which gains income by exporting oil products, plans to invest $6 billion to $10 billion to expand capacity at its only refinery to more than 450,000 barrels a day from about 260,000 now, the oil minister said yesterday.
State-owned Bahrain Petroleum Co. needs to decide within a year whether to take on a partner to develop the refinery, which is expected to add new units by 2018, the company’s chief executive officer, Gordon Smith, told reporters at the conference yesterday.
Bahrain plans to invest $15 billion to develop oil and gas resources as the Persian Gulf island state seeks to raise production and meet domestic energy needs over the next two decades, Mirza said yesterday.
The country received nine bids for the LNG terminal construction and wants to award the terminal contract by the end of this year, Mirza said. The complex, which may cost $300 million to $1 billion, is to be finished by 2014 or 2015, so the country has time to find supplies, he said.
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