MANAMA: Bahrain is now in talks with oil giant Saudi Aramco over plans to move ahead with constructing a new pipeline between the two countries.
Oil and Gas Affairs Minister and National Oil and Gas Authority chairman Dr Abdulhussain Mirza said discussions focused on what route the proposed pipeline would take to move crude from Saudi Arabia to Bahrain.
"We are now in discussions on the design and the route," the minister said on the sidelines of the Offshore Middle East Conference and Exhibition, being held at the Bahrain International Exhibition and Convention Centre.
The more than 100km project, expected to cost $350 million, is expected to take off by the end of the year.
The three-day event is being held under the patronage of Dr Mirza and is organised by Pennwell Corporation.
Dr Mirza said only after the discussions are completed will a front-end engineering and design (FEED) contractor be appointed.
The minister said the pipeline, expected to carry around 350,000 barrels per day of crude between the two countries, will replace the existing one that carries 230,000 barrels.
"What we are looking at is that the new pipeline will take a different route from the existing line and avoid crowded areas in Bahrain," Dr Mirza said.
"It will help us meet rising local energy demand and utilise our resources better."
He said Bahrain expects to steadily increase its own oil production and plans to reach 100,000 barrels per day in the next 20 years.
He said the global economy has now started showing signs of recovery, and oil prices are getting higher, which was a good sign.
He said Noga has initiated some major steps in line with the government strategy to adapt to and meet the local and global requirements and challenges.
He said one of the initiatives is to develop the Bahrain Oilfield.
"A development and production sharing agreement between Noga and a joint venture of Oil and Gas Holding Company, Occidental Petroleum and Mubadala has been signed."
He said the sharing agreement is economically attractive to all parties.
Using the latest enhanced oil recovery technology, the joint venture plans to operate over eight drilling rigs and eight workover rigs simultaneously with a programme to drill over 3,600 new development wells in a 20-year period to increase the production capacity of the oilfield.
He said the second initiative is offshore.
"At this point in time, seismic data has been obtained by Occidental and is being reviewed. Exploration and production staff is currently reviewing drilling options for Block 2 based on the new and old seismic survey data."
The minister said the third important and vital initiative is the deep gas exploration programme.
"After following a fully transparent and objective process we have bidders who wish to drill to a depth of over 15,000 feet in the search for gas in the pre-Khuff zones. The bids are being evaluated and we hope to announce the successful bidder sometime before the end of this year."
The minister said these initiatives will require over $15 billion to be spent, which for Bahrain is quite a large sum.
He said the Bapco refinery modernisation programme also involved an investment of $1.2bn.
"Our aim was to make our refinery one of the most competitive in the region with the latest technology and compliance with environmental regulations."
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