Takreer of Abu Dhabi, Finland's Neste Oil and Austria's OMV plan to build a plant in Abu Dhabi to make base oil, the main element in lubricants, Neste Oil said on Monday.
The joint venture, which aims to build the plant with an annual capacity of 500,000 tonnes and to capitalise on growing demand for high-performance base oils, would be 60 per cent owned by Takreer, 20 per cent by Neste Oil and 20 per cent by OMV, Neste Oil said in a statement.
Abu Dhabi Oil Refining Company (Takreer) is a unit of state-run Abu Dhabi National Oil Company (ADNOC). Takreer's hydrocracker would supply the feedstock for the base oil unit.
Neste's specialty products head Kimmo Rahkamo said the plant, at Ruwais in western Abu Dhabi, would begin operations in 2012, if all goes as initially planned, but that the value of the investment was unclear as it was still early days.
"The planning starts in the summer and it is about a one-year process. After that we will know how big an investment it would be and if it is worth doing," Rahkamo told Reuters.
"The building is then a 2-3 year project."
Planning of the project would start in the second quarter of 2008 at the latest, Neste said.
Neste said its earlier project to build base oil production in Bahrain was also progressing and Rahkamo said Neste would aim to make a possible investment decision by the middle of 2008, when the cost estimates are clearer.
"Thereafter, it should be ready in a couple of years," Rahkamo said. (Reuters)