Bahrain charts pathway to net-zero future
8 November 2023
The rebranding of state oil and gas holding company Nogaholding to Bapco Energies in May was the first overhaul made by Bahrain in a long, phased campaign to achieve net-zero emissions.
As a country that produces just 200,000 barrels a day (b/d) of oil and is almost solely dependent on its neighbour Saudi Arabia for oil and gas supplies, attaining net-zero emissions might be easier and quicker for Bahrain than for its hydrocarbons-heavy Gulf peers.
Bahrain appears to be aware of this potential and has been focusing its efforts on curating a programme to become net-zero by 2060. It has brought on board advisors such as Boston Consulting Group to devise a strategy to achieve its environmental goals.
Following the launch of the new brand identity, Bapco Energies published emissions-reduction targets in July, in one of the most detailed disclosures by any state energy enterprise in the GCC.
Using 2017 as a baseline year, Bapco Energies has committed to reducing absolute Scope 3 emissions in Bahrain by 30 per cent by 2035, and to reaching net-zero Scope 3 emissions by 2060.
In addition, Bapco Energies lists its Scope 1 and 2 net emissions intensity reduction targets, also using 2017 as a baseline, as 15 per cent by 2025, 25 per cent by 2030, 30 per cent by 2035, 50 per cent by 2040 and 75 per cent by 2050, to eventually reach net zero Scope 1 and 2 emissions by 2060.
Scope 1 and 2 emissions are directly related to the core operations of an energy-producing company. In contrast, Scope 3 refers to emissions for which the company is indirectly responsible – a critical measure in the fight against climate change.
Bapco Energies has made its Scope 1, 2 and 3 emissions targets public as part of a framework it has adopted to link its environmental sustainability efforts to its financing exercises. Standard Chartered Bank will support the financing framework.
Decarbonisation action
Similar to large-scale decarbonisation project investments made by Gulf national oil companies, Bapco Energies has initiated a carbon capture and storage (CCS) project estimated to be worth about $4bn, according to its CEO Mark Thomas. The project is expected to be able to sequester 10-12 million tonnes of carbon dioxide a year for at least 50 years.
The scope of the project involves sequestering the carbon dioxide emissions in a large gas reservoir in the Bahrain field, which is also known as the Awali field. The reservoir is big enough to sequester more than 550,000 million tonnes of carbon dioxide, according to Thomas.
The CCS project is bigger than any other project of its kind that has been announced, Thomas claimed in an interview with MEED.
“The good thing is that it is all onshore. Ten to 12 million tonnes of emissions are all within a 7 kilometre radius and the field where it will be stored is 10 kilometres away,” Thomas said.
“I have the space there,” he said. “The challenge is the technology and the cost. This is a very expensive project. We are looking for economies of scale and how we might stage it in a way that makes sense.
“We completed a very early feasibility study last year, in 2022,” he continued.
“We have subsequently engaged with experts in CCS and we expect that [a second] study will be done by mid-2023,” he said, adding that front-end engineering and design work for the project is expected to start before the end of this year.
Sitra refinery upgrade megaproject
Meanwhile, a $4.2bn project by Bahrain Petroleum Company (Bapco) to upgrade the Sitra refinery in Bahrain has made slow progress. The objective of the Bapco Modernisation Programme (BMP) is to boost the processing capacity of the country’s only oil refinery from 267,000 b/d to 380,000 b/d – a strategic target for Bahrain’s long-term downstream potential.
In February 2018, Bapco awarded the $4.2bn contract to perform engineering, procurement and construction (EPC) works to upgrade the Sitra refinery to a consortium led by France’s Technip Energies that includes Spain’s Tecnicas Reunidas and South Korea’s Samsung Engineering.
The project was originally expected to reach mechanical completion in 2023, with operations set to begin in 2024. MEED understands that Bapco will likely miss this commissioning schedule, however.
According to the latest update on EPC progress on the BMP, all of the catalysts required to start operating the newly-installed units have been delivered to the site, although the catalysts still need to be fully loaded into the units.
Upstream objectives
Despite its low oil production capacity, Bahrain is a key member of the Opec+ coalition of oil producers.
Bapco Upstream, the wholly-owned subsidiary of Bapco Energies, is striving to maintain, or even increase, its oil and gas production levels through capital expenditure on key projects.
Bapco Upstream, previously known as Tatweer Petroleum, is the sole operator of the onshore Bahrain field – the first oil field discovered in the Gulf region in 1932. The company produces an average of 42,400 b/d of crude oil and 1.67 billion cubic feet a day of non-associated gas from the Bahrain field.
This represents less than a quarter of the country’s oil output capacity, but is important to Manama as it is the only indigenous oil-producing asset and is key to meeting domestic oil demand.
Bapco Upstream also shares the offshore Abu Safah field, located in the Gulf waters between Bahrain and Saudi Arabia, with Saudi Aramco. Abu Safah contributes about 145,000 b/d to Bahrain’s oil production.
At present, the firm is pushing ahead with a phased field development project to install non-associated gas compressor facilities and remote gas dehydration units to maintain gas deliverability from the Bahrain field. Bapco Upstream is understood to be close to awarding a contract for EPC work on non-associated gas compressor facilities and associated works as part of this project.
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