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Sources: Russia and Bahrain are in advanced discussions over LNG deal

Three sources familiar with the situation say that Russia and Bahrain are in advanced discussions over a three year agreement for the supply of liquefied gas (LNG). Under the deal, Moscow will provide the Gulf Kingdom with 1.5 million tons of LNG.

The deal, which would be a first-of-its-kind between the two countries, would continue the expansion of Russia in the global energy markets as well as the LNG competition with United States.

Russia, behind the United States and Australia as the fourth largest LNG producer in the world, is aiming to become one of the top three LNG exporters. It plans to produce at least 100 million tonnes per annum (mtpa), super-chilled natural gas, over the next few years.

Bahrain, home to the Fifth Fleet of the U.S. Navy, is looking to increase LNG imports in order to address a gas shortage during peak summer demand for air conditioning. The kingdom received its first LNG shipment in six years last month.

Sources said that Alexander Novak, the Russian Deputy Premier, met with Mohamed bin Mubarak bin Daina of Bahrain, Minister of Oil and Environment. They discussed the purchase of 15 million tons of LNG per year, or 20 cargos of LNG, for a period of three years.

One source said that the talks are in an advanced stage, and the deal should be completed soon.

The Yamal LNG plant in Russia, where Novatek, Russia's biggest LNG producer, has a majority stake, is expected to produce large volumes.

Novatek and Bahrain’s government communication office did not immediately respond to requests for comments. Reporting by Tomour Azhari, Damascus; Marwa Rashad, London; Additional reporting by Yousef Saba in Dubai. Editing by Nina Chestney & David Goode).

(source: Reuters)