17 December 2007 11:22 [Source: ICIS news]
MUMBAI (ICIS news)--Finland-based Neste Oil has formed a joint venture with UAE producer Takreer and Austrian oil and gas firm OMV to build a 500,000 tonne/year base oils plant at Ruwais in Abu Dhabi, the biodiesel manufacturer said on Monday.
"The front-end engineering and design (FEED) of the project is expected to commence by the second quarter of 2008," it added.
Refining firm Takreer's hydrocracker unit will provide the feedstock for the facility, while Neste will bring technology and production know-how and will initially market the products, it said,
OMV will bring know-how in base oil blending and marketing experience, it added.
"The final investment decision will be made later, based on the investment cost estimates obtained during the FEED phase," Neste said.
The companies have signed the heads of term agreement covering the basic principles for the design, construction and operation of the facility, which will produce sulphur-free, very high viscosity index (VHVI) group III base oil, and its commercial terms, it added.
"Demand for high-performance, sulphur-free base oils is increasing globally due to their ability to meet current and future performance requirements and more stringent environmental standards," Neste said, adding that these base oils will be used for blending top-tier lubricants.
Abu Dhabi Oil Refining Co (Takreer) will hold a 60% stake in the joint venture, with Neste Oil and OMV owning 20% each, it said.
"Neste Oil's other project to increase base oil production in Bahrain is also progressing," it added.
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