Abdul Hussain bin Ali Mirza, Minister of Energy: Interview

Interview:  Abdul Hussain bin Ali Mirza

What strategies are being developed to encourage market-based energy prices in the future?

ABDUL HUSSAIN BIN ALI MIRZA: Energy subsidies and cheap gas prices have clearly resulted in inefficient energy usage. Over the years, the government of Bahrain has gradually reduced the level of subsidies for products like petrol gasoline, diesel and asphalt. In order to drive the country towards energy efficiency, in January 2015 the government adopted a resolution that calls for an increase in natural gas prices by $0.25 cents a year until April 2021. Moreover, we are also looking into adjusting the rates for electricity consumption to redirect subsidies to those who deserve them and to drive the major consumers towards efficiency.

The government is planning to raise prices in stages, thereby ensuring that the economy can adjust gradually over several years, giving major consumers time to take steps towards improving energy efficiency and cost-effectiveness.

What plans is Bahrain currently implementing to secure its energy future?

MIRZA: The Bahrain natural gas field is currently producing around 1300m cu feet of non-associated gas and around 600m cu feet of associated gas per day. The actual production capacity of non-associated gas is currently much higher than the average daily demand in the kingdom. For long-term planning, the National Oil and Gas Authority (NOGA) is embarking on a variety of initiatives to make sure it can meet all of our future energy needs through a mix of production, trade and conservation.

On the production end, NOGA is working to discover additional gas resources in the deep pre-Khuff Palaeozoic geological layers. This ambitious project will help delay the need to import gas in the medium to long term. The project generated a lot of interest from international companies, and the results from the first deep gas exploratory well are promising. In addition, a new round of bidding for the exploration rights to Bahrain’s offshore areas for oil and gas production is under way. Previous exploration has marked out many potential areas that will receive prospective focus over the coming years.

Another key agenda item is building the infrastructure to import liquefied natural gas (LNG). This project will enable Bahrain to import LNG to augment gas production from the Bahrain field, helping to manage the seasonal swings in gas demand, and lengthen the life span of gas reserves, while also providing additional reliability at peak demand. It is expected that the facilities will be ready to receive LNG shipments by early 2018.

Within Bahrain, the GCC support programme has provided for infrastructure upgrades, and the GCC electricity interconnection grid has enabled our countries to avoid over 1000 power outages in the six years since July 2009. In the next phase GCC countries will be able to buy and trade electricity from the grid, which will save the gas volumes that would have been required to produce that electricity.

Do you expect renewable sources to contribute significant generation capacity to the grid?

MIRZA: NOGA is determined to increase the share of the renewable energies in the kingdom’s energy supply mix for use as a source to generate electricity. This is already under way. The Bahrain Petroleum Company (Bapco) completed an experimental project in 2014 that is currently producing 5 MW of solar power using the Awali Township, a Bapco refinery and University of Bahrain rooftops and car parks. Likewise, the Electricity and Water Authority has appointed a consultant to conduct a feasibility and assessment study of solar and wind potential.

This project is targeted towards producing 3 MW of solar power and 2 MW of wind power, and we expect it will be awarded before the end of 2015.