Bapco, Neste Hold Five-Day Process-Mapping Talks on Lubricant Base Oil Joint Venture

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Researched by Industrial Info Resources (Sugar Land, Texas)--Government-owned Bahrain Petroleum Company (Bapco) (Awali, Bahrain) and Neste Oil Corporation (HEL:NES1V) (Espoo, Finland) held a five-day process-mapping workshop to implement a joint venture between the companies concerning a high-quality Sitrah lubricant base oil plant in Bahrain. The plant is part of the Sitrah refinery development.

Bapco and Neste signed the agreement to design, build and operate the 400,000-ton-per-year plant at Bapco's Bahrain refinery complex in 2005. The companies planned to make a final decision on the plant by the spring of 2006, with production commencing early in 2008.

However, it was not until June 2008 that the decision was made to establish a joint venture, known as the Bahrain Base Oil Company, with Neste holding a 45% stake and Bapco and Bahrain's government-owned Oil and Gas Holding Company (OGHC)--which fully owns Bapco--holding 27.5% each.

Construction of the plant is under way, with Samsung Engineering Company Limited (SEO:028050) (Seoul, South Korea) as the engineering, procurement and construction contractor. The project, which is estimated to cost $430 million, is reported to be 90% complete and is on track to begin operations by the third quarter of 2011.

The plant will use feedstock from the hydrocracker unit at Bapco's refinery in Bahrain, and will produce Very High Viscosity Index (VHVI), sulfur-free Group 111 base oils, which are used in blending top-grade lubricants. Neste, which is one of the world's top producers and marketers of VHVI oils, marketed under the NEXBASE brand name, will be responsible for the marketing and sales of the joint venture output.

The plant, which will take advantage of the existing refinery infrastructure, will be operated by Bapco and will consist of a process unit and a tank farm comprising eight tanks, each of 10,000-cubic-meter capacity. The project includes wharf modifications and pipelines that are connected to the rest of the refinery complex.

Prior to the workshop, meetings were held to identify the principal processes involved in the agreement, and investigating the main business segments: human resources, technical services, manufacturing, marketing, shipping and sales. In total, 50 processes were identified and categorized under six main headings, and these were then assigned to key personnel in the companies.

During the five-day workshop, six teams were formed to cover the key aspects of production, such as feedstock supply; operations; maintenance; sales and marketing; supply chain; and overall operations and optimization. Each team then reviewed and mapped their respective processes using an advanced mapping system, according to pre-established procedures.

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