Bahrain's Mashael Group will build a 30,000 barrels per day (bpd) bitumen refinery in Oman that is planned to be completed in 2012, a project official said on Tuesday.

'The agreement has been signed by Mashael and the government to build the refinery at a cost of $200 million in the Sohar Industrial Port Company (SIPC) area,' a SIPC project official told Reuters.

'Mashael will own the refinery but the land has been leased to them by SIPC for the purpose,' he added.

Bitumen or asphalt, which is produced by straight run vacuum distillation, sits at the bottom of the barrel of most crudes. The product is then put through further processing to produce market grade bitumen.

SIPC is a 50-50 joint venture between the Government of Oman and the Port of Rotterdam.

Oman is developing SIPC as a free trade zone to attract foreign investments and is home to major projects including a methanol plant, a fertiliser company, an iron pellet plant, a port and an oil refinery.-Reuters