Bahrain LNG, the developer of the Gulf state’s receiving and regasification terminal for liquefied natural gas (LNG), has closed a $741 million syndicated loan for the platform’s construction, according to a company statement on Monday.
“The project is being developed to supplement local gas production in Bahrain and ensure capacity to meet peak seasonal gas demand and industrial growth,” the statement said.
While the Gulf region is known for its large oil reserves, countries including Saudi Arabia and Bahrain have struggled to keep up with demand for gas and have been searching for a way to address the issue, which has crimped economic development.
Standard Chartered, Arab Petroleum Investments Corp (APICORP), and Korea Development Bank were the institutions leading the limited recourse project financing, which was provided by nine international and regional lenders.
About 80 percent of the financing was backed by commercial and political risk cover provided by export credit agency Korea Trade Insurance Corporation.
The LNG project will have a capacity of 800 million standard cubic feet per day. Completion is expected in 2019, after which the project will be operated under a 20-year agreement.
Developed on a public-private partnership (PPP) basis, the contract to build the project was awarded in December 2015.
Bahrain LNG is jointly owned by the state investment firm The Oil & Gas Holding Company and a build consortium comprising Teekay LNG Partners L.P., Gulf Investment Corporation and Samsung C&T.