Front-end engineering and design (FEED) work is due to begin by the end of November by the Finnish/US Neste Jacobs, and take about eight months. An engineering, procurement and construction (EPC) contract is due to be tendered in early 2006. The contracting strategy will depend partly on whether the Tender Board considers the project as falling under its jurisdiction. However, Neste wants the project to be carried out on a fast-track basis.

The project calls for the routing of about 12,000 barrels a day of unconverted oil from the existing hydrocracker to a unit which will convert the feedstock to lube base oil, predominantly for export. The US' Chevron Corporationhas carried out basic engineering.

The project will be funded out of the $1,000 million debt package secured by Bapco in early 2005. The funds also cover the low-sulphur diesel production (LSDP) project, on which construction is about 15 per cent complete, and the refinery gas desulphurisation (RGD) project, for which the engineering, procurement and construction (EPC) contract was awarded to Foster Wheeler Italianain September.