The parties have signed the heads of terms agreement covering the basic principles for the design, construction, and operation of the facility and the commercial terms of the project. Takreer will hold a 60% stake and Neste Oil and OMV will each hold 20%.
Neste said that the planned facility would be capable of producing 500,000 tons a year of base oils used for blending top-tier lubricants. Feedstock for the base oil facility will be provided from Takreer’s hydrocracker unit. Neste Oil will bring technology and production know-how and will initially be responsible for marketing the products. OMV will bring know-how in base oil blending and marketing experience.
The front end engineering design of the project is expected to commence by the second quarter of 2008. The final investment decision will be made later, based on the investment cost estimates obtained during that phase.
Neste noted that 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.
