Abu Dhabi Oil Refining Company – Takreer, Neste Oil of Finland and the Austrian oil and gas group OMV are proceeding with their plans to form a new joint venture company.

The JV is to build a plant to produce sulfur free, Very High Viscosity Index (VHVI) Group III base oil in Ruwais (Abu Dhabi).

The parties signed the Heads of Terms agreement in Abu Dhabi which includes basic principles for the design, construction, and operation of the base oil facility and the commercial terms of the project.

The base oil will be used for blending top-tier lubricants. The joint venture company will be owned 60 per cent by Takreer and 20 per cent  each by Neste Oil and OMV.

The planned facility will be capable of producing 500,000 tonnes per year of VHVI base oils used for blending top-tier lubricants. Feedstock for the base oil facility will be provided from Takreer Hydrocracker unit at Ruwais Refinery. Neste Oil will bring in technology and production know-how and will initially be responsible for marketing of the products. OMV will bring in know-how in base oil blending and marketing experience. The Front End Enginering Design (Feed) is planned to be assigned by the second quarter 2008. The parties intend to make a final decision on the investment after the Feed phase.

Demand for high performance sulfur free base oils is increasing globally due to their ability to meet current and future performance requirements and more stringent environmental standards.

The project combines the strengths of all three parties in design, production and marketing high performance base oils.--TradeArabia News Service