Bahrain Petroleum Company (Bapco) has established a joint venture with Finlands Neste Oil, Bahrain Base Oil Company, to build a high-quality lubricant base oils plant in the kingdom.
The $400 million plant will produce and market high performance lube-based oil products, which will act as a feedstock for lube producers.
The plant with an annual capacity of 400,000 tonnes of Very High Viscosity Index (VHVI) base oil for use in blending top-tier lubricants will be one of the worlds largest base oil plants when it begins production by the end of 2011.
On commissioning, it will produce 9,000 barrels of lube-based oil products per day expected to meet 16 per cent of the demand for lube oil products in the region. The kingdoms National Oil and Gas Authority and Bapco together will have 55 per cent ownership of the company (27.5 per cent each) while their Finnish partner, which is the world’s leading producer and marketer of lube oil, will account for 45 per cent, same as its total investment in the $400 million venture.
The Oil and Gas Affairs Minister and National Oil and Gas Authority Chairman Dr Abdul-Hussain bin Ali Mirza and Neste Oils deputy chief executive and executive vice president, Speciality Products, Kimmo Rahkamo, have signed an agreement clearing the decks for the lube oil project. As per the agreement, feedstock for the new base oil facility will be provided by the hydrocracker unit commissioned in 2007 at Bapco’s oil refinery. The Finnish refiner will be responsible for the sales and marketing of the output of the joint venture plant while Bapco will also provide the operations, maintenance and management services.
“Demand for these sulphur-free base oils is increasing globally, thanks to their ability to meet current and future performance requirements, as well as more stringent environmental standards. I strongly believe that this project will prove a success for both parties,” said Kimmo Rahkamo.
“This project underlines Neste Oils and Bapcos commitment to new-generation, high value-added base oils.”
Neste Oil is one of the world’s leading producers and marketers of VHVI base oils, which are marketed under the NEXBASE brand. He said the new joint venture with Bapco would further extend the global reach of the companys business in the lube oil sector.
