Bapco, along with its strategic partners Nogaholding and Neste Oil, yesterday signed a $314 million engineering, procurement and construction (EPC) contract with Samsung Engineering for its joint venture lube base oil plant project.
The deal is part of the strategic investment programme in the Bahrain refinery and marks a significant step forward in Nogaholding and Bapco’s strategic goals to diversify their product range and produce higher value products.
“Samsung is not a stranger to Bahrain,” said Oil and Gas Affairs Minister and Bapco and National Oil and Gas Authority chairman Dr Abdulhussain Mirza.
“Bahrain has a longstanding commercial relationship with Korea and wishes to strengthen this relationship.
“We have also been looking forward to further enhance co-operation with them for the good of the oil sector in Bahrain.
“The signing of this agreement is the fruit of such goodwill to strengthen relationship between the two countries in various fields,” he added.
“Samsung Engineering is the first Korean company to undertake a major EPC contract with Bapco,” he said.
“The successful implementation of the lube base oil plant project is bound to open new opportunities for further co-operation particularly as Bapco moves forward with its plans beyond its current strategic investment programme to address projects being developed under the refinery master plan, and in its joint search with Nogaholding for new business and investment opportunities anywhere in the world, that will bring the highest return on investment for Bahrain.”
The lube base oil plant, which will be the largest of its kind in the Middle East, will produce more than 400,000 tonnes per year of Group III, very high viscosity index lubricant base oils which is the raw material for manufacturing high-quality finished lubricants.
“This first Nogaholding, Bapco and Neste Oil joint venture promises to be a commercial success as demonstrated by the trust and confidence displayed by all so far,” Dr Mirza said.
“We value this partnership and expect it to grow further into other potential projects benefiting the parties.
“This is a typical win-win joint venture project where the contributions and strengths of the partners combined, is greater than the sum of each one alone.
“Bapco, with its renowned operation excellence records and experience in refining, will operate the plant which will take its feed from the newly commissioned hydrocracker unit at the Bapco LSDP complex.
“Neste Oil, with its extensive marketing capabilities and renowned product brands, will market the product around the world.
“For the newly formed Nogaholding Company, this project represents the first investment as a shareholder and it is going to be the beginning of a series of more successful projects to come in the future,” he added.
The value of Samsung EPC contract is $314m while the total cost of the project is estimated to be about $430m.
The agreed project execution period is 33 months which starts from the project kick-off meeting planned during the fourth week of this month.
The contract stipulates maximising the use of local contractors, suppliers and providers of services.
More than 1,500 people will be engaged on the project during the construction period, and about 30 as permanent operators.Back