What a year 2025 has been for the international energy market. The war in Ukraine is forcing a new wave of sanctions on Russian energy companies. There are increases in demand for gas and oil despite overwhelming calls to integrate the renewable energy market, and the fluctuation of oil and gas prices has resulted in the market operating in a constant state of evolution. Now, Bapco, Bahrain’s state-owned energy company, has signed off on significant output increases from its flagship refinery as part of a broader economic modernization project unfolding in the Middle Eastern nation.
Bahrain is aiming to modernize an aging refinery to meet current output capacity levels
The nation of Bahrain forms part of the oil-rich countries in the Middle East. With substantial amounts of natural energy resources, the nation has been aiming to modernize an aging refinery, the only one in the country to meet international standards, while delivering increased output in the coming years. The planned increase of output forms part of the Bapco Modernisation Programme.
The project at the nation’s only refinery, Sitra, which is expected to cost at the very least $7 billion, was inaugurated by Bahrain’s King Hamad Bin Isa Al-Khalifa, and sets the stage for the refinery to increase output to meet the astonishing increase in demand for natural energy resources such as oil and gas around the world.
Notably, several inside sources have stated that the EPC contracts are ongoing, and that work still needs to be completed before the expected increase in output becomes a reality.
“The companies involved in the EPC work have to meet certain targets before their work is done. They have to get the process volumes to a certain level and then maintain that for a certain time period before they can say that they have fully met their contractual obligations.” – Anonymous insiders familiar with the project
The Bapco Modernisation Programme is crucial to Bahrain’s downstream potential
Central to Bahrain’s Vision 2030 economic development strategy, the modernization of the Sitra refinery will boost the long-term downstream ambitions of the nation, as noted by several industry insiders. Bapco awarded the EPC works on the BMP to a consortium of international energy companies, namely France’s Technip Energies, Spain’s Tecnicas Reunidas, and South Korea’s Samsung E&A.
The Sitra refinery is now heading into 90 years of operations, and is in desperate need of a facelift. Technip led the project’s front-end engineering and design work, while US-based Chevron acted as a vital consultant for the project, and Australia-based Worley was the project management consultant. At the inauguration ceremony were the following high-profile attendees:
- Bahrain’s King Hamad Bin Isa Al-Khalifa
- Salman Bin Hamad Al-Khalifa, Bahrain’s crown prince and prime minister
- Sheikh Nasser Bin Hamad Al-Khalifa, chairman of the board of directors of Bapco Energies
The modernization of the aging Sitra refinery comes as ADNOC, Abu Dhabi’s state-owned energy company, plans its own scale-up at the Ruwais refinery, pointing to the increased demand for energy supplies from the Middle East.
The evidence would suggest that the energy transition has not impacted Bahrain’s ambitions
A wave of renewable energy projects has swept across the global market in recent times. New and potentially market-shifting projects are being developed in regions of the world that have expressed their desire to integrate the renewable energy market into their national grids, such as Turkey, which announced that it has secured funding for a 100 MW solar PV plant to support its energy transition. Bapco plans to install several new refining units at the Sitra refinery to boost the nation’s energy output over the coming years and setting the stage for a new era of oil production for the state of Bahrain.
