Russian energy giant Gazprom could soon be setting up its regional hub in Bahrain, it has been revealed.

Oil and Gas Affairs Minister and National Oil and Gas Authority (Noga) chairman Dr Abdulhussain Mirza said talks with the company are at an advanced stage and a deal could emerge in the next few months.

'Though the deal covers supply of liquefied natural gas (LNG) to Bahrain either directly from Russia by container ships or through other means, the company has expressed a desire to set up the Bahrain hub,' Dr Mirza told our sister newspaper Gulf Daily News (GDN).

'This hub then could be used to supply gas to neighbouring GCC countries or even as far away as India and Pakistan,' he said.

'There will be a phenomenal increase in demand for gas in the next decade and we will then need these supplies,' the minister said.

'Though the GCC region will need a lot, the Indian Subcontinent demands will be far greater.'

He said Gazprom could be looking at tapping the South Asian markets by sending supplies through Bahrain.

A tender to build a $800 million LNG terminal in Bahrain, near the Khalifa bin Salman Port, is expected to be awarded sometime in the next two months and construction will begin soon thereafter.

This terminal is expected to be up and running by the end of 2014, by which time Bahrain will also be ready to receive LNG supplies.

Bapco major engineering projects general manager Isa Al Ansari had earlier told the GDN extensive studies had revealed a large area east of the Khalifa bin Salman Port to be the most suitable site of the project, which would initially had a capacity of 400m standard cubic feet of LNG per day.

He said the terminal would be built in such a way that there was a provision to increase the capacity to more than double.

A study to set up the terminal was launched in October 2008 by Noga in its bid to secure energy for Bahrain's future needs.

The object of the study was to determine whether or not the introduction of LNG into Bahrain was a realistic and economic option.

Dr Mirza had then said Bahrain was committed to the ultimate goal of securing the necessary energy to fuel the economic growth and prosperity of Bahrain.

He said Bahrain would, in the near future, need more than 1,000 standard cubic feet of LNG per day to meet its energy needs.

Dr Mirza had visited Russia in October last year when he signed a mutual co-operation agreement with Gazprom.-TradeArabia News Service