Negotiations are ongoing between Bapco and Finland’s Neste for a joint venture to construct a lube base oil plant, which is due to be completed in 2008. The UK’s Jacobs Engineering is carrying out the front-end engineering and design (FEED).

Plans for petrochemical capacity linked to the refinery have been abandoned, however. ‘We studied a naphtha-based cracker but decided it was not economically feasible,’ says chief executive officer Hussain Tadayon. However, expansion of refining capacity is under consideration and Saudi Aramco and Bapco are jointly studying the possibility of expanding and relocating the pipeline that supplies crude to the facility from Saudi Arabia.

Bapco’s tendering procedure has come under scrutiny recently, following publication of a critical report by the National Audit Court and the subsequent appointment by the company of PricewaterhouseCoopers (PWC) to review its procedures.

‘The tender law was changed in early 2003 and it took us some time to comply with it, plus in some cases we have partnerships with certain companies or the technology is proprietary, in the case of spare parts, for example,’ says Tadayon. ‘Anyway, on most points, we agreed ourselves and have already put in place new practices.’