Bahrain's Bapco sees expanded plant up in Q4, seeks heavier crude and more LNG

By Trixie Yap and Florence Tan

SINGAPORE, Sept 8 (Reuters) - Bahrain's state oil firm Bapco Energies expects to commission its Sitra refinery expansion in the fourth quarter of this year, and will be looking to buy heavier crudes than it now runs and more liquefied natural gas, a senior executive said on Monday.

The expansion will increase Sitra's refining capacity to "just under 400,000 barrels per day" from about 265,000 bpd, said Bapco's group chief strategy officer, Alexander van Veldhoven, speaking at the APPEC Conference in Singapore.

"We are in the very last phase of that programme. Most units are all up and running, and we are kind of getting close to commissioning the last units in the refinery," he added.

The refinery expansion will boost the plant's ultra-low sulphur diesel production by 72% and jet fuel production by 90%, its company website showed.

Also, the refinery is expected to produce more naphtha, van Veldhoven said.

On the feedstock front, Bapco Energies still plans to import heavier crude for the expanded plant.

"It is undeniably the case, when you build residual hydrocrackers with the ability to go deeper into the bottom of the barrel ... we're going to be stepping away from just running sweet Arab crude that comes from the Saudi-Bahrain pipeline," said van Veldhoven.

When asked about Bapco's partnership with French oil major TotalEnergies TTEF.PA, van Veldhoven said "there is a plan for further cooperation" and possibly a joint venture.

Last year, the Bahrain oil major signed a trading partner agreement with TotalEnergies.

"We already started to trade together … the next phase is to really kind of incorporate that and set it up as an integrated joint venture kind of trading company that has yet to come. We are getting very close to that," said van Veldhoven.

On the broader energy front, Bapco is looking to buy more LNG gas next year compared to this year. It was in talks to secure more LNG supplies from Russia, Reuters reported in May.

"It's definitely going to ramp up," said van Veldhoven, referring to the country's purchase of the super-chilled fuel, adding that they will be in the market "for both spot and medium term cargoes". He did not comment on volumes.

"We're coming to the market in the fourth quarter."