Bahrain looks to private finance for gas projects
Bahrain’s Nogaholding looks to international project finance for upcoming projects
Projects include a planned LNG storage terminal
Firms are also bidding for BOT deals in Bahrain
International funding needed
Bahrain’s Oil and Gas Holding Company (Nogaholding) will be looking to international project finance markets for upcoming projects, Qaisar Zaman, general manager of investments, told the ApicorpEbergy Forum in Manama on 19 November.
It will seek greater private sector involvement and funding in projects such the LNG storage terminal.
“The floating LNG terminal is ideal for BOT [build operate transfer],” says Zaman. “The private sector can bring its superior ability to construct, finance and operate, and we will pay a tariff.”
Bahrain National Oil and Gas Authority (Noga) is evaluating BOT bids for the project from three joint ventures.
Bahrain has seen its government revenue fall sharply due to lower oil prices.
“In the current oil price scenario, government revenue is declining quite fast,” says Zaman. “We will look at the private sector as an intelligent pool of capital and operational skills.”
Manama-based bankers have been approached by contractors and Noga on three projects in the pipeline, but have received no information on the timescale.
They are the storage terminal, Bahrain Petroleum Company (Bapco)’s pipeline to Saudi Arabia, which has recently been awarded, and Bahrain National Gas Company (Banagas)’s gas processing plant, for which bids have been submitted.
Nogaholding owns a 100 per cent of Bapco, a 75 per cent share in Banagas and stakes in other Bahraini oil and gas sector companies.
However, due to the small size of the domestic banking system, Nogaholding will seek foreign sources of funding.
“Export credit agencies are an essential ingredient in Bahrain,” says Zaman. “They can give the tenor and liquidity we need. We have larger requirements than what is available in the domestic and regional banking system.”
GCC banks have limited appetite for long-tenor infrastructure projects.
Manama is also looking at other projects that could be turned over to the private sector, as long as the government retains some control of quality and cost.
“We have a few other projects in mind,” says Zaman. “We will be outsourcing some infrastructure and petrochemicals projects to third parties, strategic players with international reputations to run.”