South Korea’s Hyundai Engineering Company has awarded Saudi Arabia’s Mohammad Al-Mojil Group a $52.5m contract at a $463m lube oil factory in Abu Dhabi.

Hyundai was awarded the engineering, procurement, construction (EPC) and commissioning contract by Abu Dhabi Oil Refining (Takreer) in May 2010 and has subsequently subcontracted out the construction works.

Mohammad al-Mojil Group announced on the Saudi bourse website that it will start construction work on the project in February with completion due for December 2012.

The contract is the first one the company has won in the UAE it added.  

“Subcontracting out packages is normal practice for a project of this size,” says a source familiar with the project. “Work is progressing well and everything is running on schedule.”

The facility will produce 600,000 tonnes a year (t/y) of base oils after commissioning is completed. Out of the capacity, 500,000 t/y will be group III base oils used as industrial lubricants and 100,000 t/y will be group II base oils, which are commonly blended to make lubricants for vehicles.

The facility will be located at Ruwais in the Western Region of Abu Dhabi and commercial production is due to begin in 2013. Takreer, a subsidiary of the Abu Dhabi National Oil Company (Adnoc), wholly owns the project.