Bahrain still has to decide on $5 billion upgrade of Sitra refinery

The proposed Sitra refinery upgrade and expansion would increase capacity to 360,000 barrels a day.

Bahrain has yet to decide on a $5 billion expansion and upgrade of its refinery that would boost capacity by around 40 per cent, the country’s oil minister said on Tuesday.

Bahrain, the smallest energy producer in the Arabian Gulf region, has been mulling expanding its 260,000 barrels-a-day Sitra refinery. The proposed upgrade and expansion would increase capacity to 360,000 barrels, said Abdul Hussain bin Ali Mirza at a renewable energy conference in Abu Dhabi.

“That (upgrade and expansion) depends on the result of the feed (front end engineering design) which we will get by the end of the first quarter of this year,” said Mr Mirza.

“All the costs have generally come down with the decline in crude prices. It is a good time to proceed with the project.”

The project would include upgrading the quality of products and increasing the production of middle distillates such diesel and kerosene, while reducing fuel oil output, he added. French oilfield services company Technip is doing the feed for the refinery.

Arabian Gulf states are expanding their refineries to produce more value-added products, to develop a downstream industry and diversify income away from oil and gas, and to meet rising local demand for fuels such as petrol.

The total capacity of Gulf refineries is forecast to increase to approximately 7.4 million barrels per day (bpd) by about 2022, a 70.5 per cent increase over the current 4.3m bpd capacity, according to the consultants Frost & Sullivan.

Separately, the minister said Bahrain has yet to start negotiations for importing liquefied natural gas (LNG) because its LNG terminal will not be finished until 2018.

Bahrain is seeking to import LNG, which is gas cooled to a liquid to be transported by ships, to cater to rising gas demand for power generation and industries.

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