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Financial close for Bahrain LNG terminal

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LNG Industry,

Bahrain LNG WLL has completed limited recourse financing for the first LNG regasification terminal in the Middle East that has been developed on a PPP basis.

Bahrain LNG WLL is jointly owned by the Oil and Gas Holding Company (nogaholding) and a consortium consisting of Teekay LNG Partners LP, Gulf Investment Corp. (GIC) and Samsung C&T.

The project was awarded to the Teekay LNG-GIC-Samsung consortium in December 2015 by the National Oil & Gas Authority (NOGA) of Bahrain following a tendering process. The project is being developed to supplement local gas production in Bahrain and ensure capacity to meet peak seasonal gas demand and industrial growth. It will also enable Bahrain to procure internationally-traded LNG on a competitive basis.

The regasification project will have a capacity of 800 million ft3/d and will be owned and, once completed in early 2019, operated under a 20-year agreement. It will comprise a floating storage unit (FSU), an offshore LNG receiving jetty and breakwater, an adjacent regasification platform, subsea gas pipelines from the platform to shore, an onshore gas receiving facility, and an onshore nitrogen production facility.

The engineering, procurement and construction (EPC) contract has been awarded to GS Engineering and Construction. Teekay LNG will supply the FSU, which will be modified for this project, through a 20-year time-charter agreement.

A syndicate of nine international and regional banks is participating in the US$741 million loan, which has a tenor of 20 years. Korea Trade Insurance Corp. (K-SURE) provided commercial and political risk cover for approximately 80% of the financing. Standard Chartered Bank, Arab Petroleum Investments Corp. (APICORP), and the Korea Development Bank acted as pathfinder banks.

His Excellency Shaikh Mohamed bin Khalifa Al-Khalifa, Minister of Oil, commented: “The Bahrain LNG Import Terminal is a key component of our plans for the further expansion of the energy and related sectors of the Kingdom of Bahrain. The achievement of financial close is a critical milestone in the continued development of the Bahrain LNG Import Terminal Project and we congratulate the sponsors, their supporting lenders and K-SURE on their achievement after many months of sustained effort.”

Dr. Dafer Al Jalahma, Chief Executive of nogaholding, said: “It is encouraging to see the successful closing of the financing for the project, and for the strong support shown by lenders and K-SURE that resulted in the attractive terms achieved. I commend the nogaholding team for its sustained effort to achieve this result.”

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