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On the 17th of December 1979 His Highness Shaikh Isa Bin Salman Al-Khalifa, the Late Amir of the Kingdom of Bahrain, inaugurated the Associated Gas Project marking a major step in the Government of Bahrain’s determination to use energy resource effectively. The primary objective of this project was to use the large quantities of associated gas extracted from the Bahrain Oil Field which, for more than 40 years, had previously been wasted. Now this valuable natural resource, through maximum utilization, produces a substantial contribution to the National Economy and has created employment opportunities for the national workforce.

The project was incorporated as the Bahrain National Gas (BANAGAS), 75% owned by the Government of Bahrain with the remaining 25% equally owned by the Arab Petroleum Investment Corporation and Caltex Bahrain. At a cost
of US$ 100 million the project included the construction of four gas compressor stations, a processing plant to recover Propane, Butane and Naphtha, and a storage area at Sitra. It was indeed an historic event when the Japanese tanker “Yuyo Maru” was loaded with the first shipment of 5,000 metric tons of Butane in March 1980. Since then, the Company has continued to produce LPG products conforming to the highest international specifications.

Due to the substantial increase in the quantity of associated gas extracted from the Bahrain Oil Field during the subsequent years, the Company decided to expand its design capacity to process all the available quantity of associated gas. In 1988, a 74 US$ million Expansion Project was launched to upgrade the plant processing capacity from 170 to 280 MMSCFD. The Project, which was implemented by the Government of Bahrain as a sole venture, involved construction of two additional compressor stations and a new processing train at the Central Gas Plant and at the Sitra Storage area. The Project was commissioned in October 1990.

The associated gas is separated from crude oil at 16 well manifolds located around the Bahrain Oil Field. The gas is then transferred through a network of pipelines to seven compressor stations suitably located in the field. In addition to this associated gas, low pressure refinery gas is also transfered to the compressor station number 7 for pressure improvement.
The low pressure gas is compressed at these stations from about 20 PSI to 440 PSI before being routed to the Central Gas Plant.
Another stream of high pressure gas from the Arab gas wells joins the associated gas prior to its entry into the Plant.
At the Central Gas Plant LPG is recovered from the gas and Propane, Butane and Naphtha produced through fractionation. Propane and Butane are transported to the Sitra Storage area and stored in refrigerated LPG tanks for onward export to various parts of the world while Naphtha is transferred to the Bahrain Refinery (BAPCO).

The residual lean gas, mainly methane and ethane, is routed to Aluminum Bahrain, the Bahrain Refinery and Electricity Directorate's Riffa Power Station to be used in operating their gas turbines after meeting the Company’s own fuel gas requirements.

When the Company started operations in 1979 Bahraini personnel represented 48% of the total workforce in the Company. However, in line with the Company’s policy to create an efficient and highly skilled national workforce, vigorous development and training programs were implemented. At present the Bahraini workforce makes up 93% of the total workforce.