Russia and Bahrain sign MOUs on LNG, upstream cooperation

Moscow (Platts)--7 Sep 2016 748 am EDT/1148 GMT

Russia's Gazprom and the state geological exploration services company Rosgeologia have signed memorandums of understanding with Bahrain's state-owned Noga in the areas of LNG and oil and gas exploration, the Kremlin said late Tuesday.

The agreements were signed during the meeting of Russia's President Vladimir Putin and King Hamad bin Isa Al Khalifa of Bahrain in Moscow.

Gazprom's MOU with Noga, the state-owned oil and gas holding company of Bahrain, includes expanding cooperation in LNG, the Kremlin said in a statement, without giving further detail.

Bahrain, looking to cover a shortfall in domestic gas supply, is building an 800 MMcf/day (22.65 million cubic meters/day, or 8.27 Bcm/year) LNG terminal, expected to start operations in July 2018, according to the project's website.

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Gazprom and Noga earlier discussed Russian gas supplies to the terminal once it is completed, and planned to sign an agreement this year.

No volumes for potential supplies have been disclosed.

Gazprom declined to comment on details.

Gazprom may also use the terminal for further LNG distribution to other Middle Eastern states, St Petersburg's governor, Georgiy Poltavchenko, said in May following a trip by a regional delegation to Bahrain.

Russia has been negotiating LNG deliveries of several billion cubic meters to the island kingdom in the Persian Gulf, he said at the time.

Gazprom leads the Sakhalin 2 consortium operating Russia's only producing LNG plant on the island of Sakhalin in Russia's far east. The plant has a nameplate capacity of 9.6 million mt/year, but has been consistently producing above 10 million mt/year since 2012.

The company plans to expand the Sakhalin 2 capacity by 5 million mt/year, and simultaneously build another 10 million mt/year LNG plant in western Russia, on the Baltic Sea coast. The capacity of the Baltic LNG project could double in the future, the company has said.

Russia's ambassador to Bahrain, Vagif Garayev, said earlier this year more Russian investment projects in Bahrain's developing oil and gas sector are expected.

Rosgeologia's MOU with Noga envisages strengthening partnership in the area of geophysical research aiming at oil and gas exploration and production, the Kremlin said without giving further detail.

The heads of state also signed intergovernmental agreements on the establishment of the Intergovernmental Russian-Bahraini Commission on Trade, Economic, Scientific and Technological Cooperation, and on military cooperation.

--Nastassia Astrasheuskaya, nastia.astrasheuska@spglobal.com
--Edited by Alisdair Bowles, alisdair.bowles@spglobal.com

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