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Bahrain, Shell agree to study gas supply, imports

Reuters

Mon Feb 2, 2009 1:00am EST

MANAMA, Feb 2 (Reuters) – Bahrain and Royal Dutch Shell (RDSa.L) on Monday signed an agreement to study gas imports to meet the kingdom’s growing demand.

Bahrain, like its Gulf Arab neighbours, saw demand for natural gas rise rapidly as its economy grew on the back of a petrodollar-fuelled boom in the region. Bahrain aims to boost domestic supply and imports.

The memorandum of understanding calls for studies on importing liquefied natural gas (LNG) and also imports via pipeline, the Kingdom of Bahrain National Oil and Gas Authority (NOGA) and Shell said in a joint statement.

The two were also looking at ways to meet Bahrain’s needs in the short term, but gave no further details in the statement.

Bahrain has held talks with Iran over importing 1 billion cubic feet per day (cfd) of natural gas.

Gulf neighbour Qatar is the world’s largest exporter of liquefied natural gas (LNG), which is gas chilled to liquid form for export on specially designed ships.

Other Gulf Arab states have turned to Qatar to meet rapidly rising demand. State gas producer Qatargas and Shell have signed an agreement to supply LNG to Dubai from 2010.

Kuwait aims to begin importing gas from Qatar to meet peak demand this summer.

Iraq may also export gas in the future. Shell signed a multi-billion dollar deal with Iraq in September to capture natural gas produced with oil that is burnt at oilfields, some of which could eventually be exported as LNG.

Bahrain consumed 1.3 billion cubic feet of gas per day in 2007 and expects consumption to rise to 2 billion cubic feet per day in the long term. (Reporting by Frederik Richter; Editing by Simon Webb and Ben Tan)

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