A joint venture of South Korea’s Daelim Industrial and UK-based Petrofac has been awarded a $2.1bn contract to expand the Sohar oil refinery in Oman, according to a statement released by the two companies.

Project owner Oman Refineries & Petroleum Industries Company (Orpic) received six bids for the project in September. According to Oman’s government tender board, Daelim submitted the third-lowest offer.

When the commercial bids were opened, it was revealed that fellow South Korean group Samsung Engineering had submitted the lowest offer of $1.89bn. Orpic was not immediately available to comment on the contract award.

The 50-50 joint venture of Daelim and Petrofac will carry out the engineering, procurement and construction (EPC) work over the next 36 months. “The contract includes improvements at the existing facility as well as the addition of new refining units,” the companies said.

Orpic confirmed that it had awarded the contract to Daelim and Petrofac.

“The award was based on a competitive and transparent tendering process which started in December 2012,” said a company spokesman. “We do not wish to disclose the value of the contract, but we can confirm that economic factors played an important role in finalising our selection process.”

Orpic is expanding the refinery’s capacity to 187,000 barrels a day (b/d), from 116,000 b/d, to meet growing demand for fuel and petrochemicals feedstock.

The project will include a 71,500-b/d crude distillation unit, a 96,800-b/d vacuum distillation unit, a delayed coker unit, and additional utilities and offsite facilities.

As well as providing extra fuel to meet growing demand in the sultanate, the unit will increase the facility’s propylene production, which will allow Orpic to run its Sohar polypropylene plant at full capacity. It will also provide capacity for the $3.6bn Liwa Plastics petrochemicals project planned nearby.