An LNG carrier that was to serve as a storage facility for Bahrain’s LNG import terminal is set to be chartered out for trading, in a deal that could see it employed for up to two years.
Brokers said Teekay LNG’s 173,400-cbm Bahrain Spirit (built 2018) is being fixed for a year to a trader with an option to extend the hire by 12 months.
TradeWinds reported in June last year that the ship had been chartered out to trading company Gunvor under a nine-month deal with options to extend the hire.
Seasonal
Talk of a fresh year-long-plus deal on the Bahrain Spirit is significant in that it would mean the ship will not be used at all during a 12-month stretch by terminal operator Bahrain LNG.
The LNG carrier is chartered to Bahrain LNG — in which Teekay LNG holds a 30% stake — on a seasonal basis to act as a storage facility for the Gulf state’s import terminal.
In a reply to TradeWinds’ questions, Bahrain LNG shareholder The Oil & Gas Holding Co (nogaholding) said: “The Bahrain LNG import terminal, which was commissioned in November 2019 and has been operational since 1 December 2019, forms a key part of the energy infrastructure of Bahrain, allowing Bahrain to supplement available natural gas by importing LNG to mitigate against and to handle any potential gas shortages.
“The terminal remains in temporary shutdown as instructed by the sole customer — NOGA/Government of the Kingdom of Bahrain. Meanwhile, the FSU remains on sub-charter externally.”
Aside from Teekay LNG, local developer nogaholding controls a 30% stake in Bahrain LNG, Gulf Investment Corp 24% and Samsung C&T Corp 16%.
The intention was that the floating storage unit (FSU) would be chartered out in the period when it was not needed by the terminal.
But those following this project told TradeWinds that, apart from a commissioning shipment, the LNG carrier has not been used to bring in any cargoes.
Two observers said they expect the terminal will be mothballed as there is now no demand for LNG imports due to local gas discoveries.
The LNG carrier is on charter to Bahrain LNG until 2038. Teekay LNG’s shareholding in the terminal runs to 2039.
Slow start
The Bahrain Spirit arrived at the Khalifa Bin Salman Port terminal in August 2019 with a full cargo of LNG.
The import facility — designed to use LNG supplied from the FSU to a platform-mounted regasification unit — had been due to start up a year earlier.
The ME-GI LNG carrier had been modified for its FSU role on the back of its long-term charter deal with Bahrain LNG.
In January 2020, Bahrain LNG announced the completion of the mechanical construction and commissioning of the terminal.
It said the last of the commissioning shipment on board the vessel was being sent out so that the FSU could “redeploy on short-term trade as intended”.
