Saudi Arabia and Bahrain have approved plans to lay a 350,000-barrel per day (bpd) oil pipeline between the two countries, with the link expected to be commissioned by the third quarter of 2016, Bahrain Petroleum Company (Bapco) said on Wednesday.

The pipeline will replace an ageing 230,000 bpd link and will help Bapco expand its 267,000 bpd Sitra refinery to up to 460,000 bpd pf capacity.

Crude oil will flow from Saudi Aramco's Abqaiq plant via the 115 km pipeline, 74 km of which will run overland and the rest under the Gulf, Bapco said.

Bapco said it was working with Saudi Aramco to prepare for an engineering, procurement and construction (EPC) contract tender in the fourth quarter of 2013, with the contract expected to be awarded by the second quarter of 2014.

Bahrain relies on output from the Abu Safa oilfield that it shares with Saudi Arabia.-Reuters