Neste Oil, Bapco and Oil and Gas Holding Co. last week reached a milestone in their base oil project in Bahrain with the formal establishment of their joint venture, called Bahrain Lube Base Oil Co.
Incorporation of the joint venture company was one of the important administrative steps related to the company, Matti Lehmus, Nestes executive vice president for oil products, told Lube Report. Bapco and Oil and Gas Holding together hold a 55 percent stake in the joint venture, while Espoo, Finland-based Neste holds the remaining 45 percent. Bapco is the national oil company of Bahrain, and Oil and Gas Holding Co. is a Bahraini joint stock company that controls the governments stakes in the countrys main energy firms and invests in the energy sector.
The plant is expected to produce 400,000 metric tons per year (about 7,700 barrels per day) of API Group III base oil. The expected investment cost for the project is in the $400 million to $450 million range, according to Lehmus.
He said construction work at the site has already begun. The Bahrain VHVI base oil project … that was decided last summer is progressing according to plans and within schedule for start-up in second-half 2011, Lemus said.
The joint venture partners awarded a $314 million contract to Seoul, South Korea-based Samsung Engineering in August last year for engineering, procurement and construction for the Bahrain project.