Bahrain has awarded Japan's JGC Corp a $431.6 million deal to modernise the state-owned ageing oil refinery, a senior official said yesterday.

JGC was competing with two other international firms: International Bechtel Co, which offered $449.127 million, and Technip Middle East, whose bid was $462.15 million.

The bids were for the Engineering Procurement Construction Management agreement, part of a $650 million plan to modernise the oil refinery at Bahrain Petroleum Company (Bapco). The project is Bapco's largest.

"What we took in account was the price, meeting technical specifications, and other conditions of the terms of the tenders, like duration," Minister of State Abdul-Hussain bin Ali Mirza told Reuters.

"The signing of the deal is expected sometime in January and the whole project will be completed by 2007," Mirza said.

The total project involves building a new 40,000 barrel per day (bpd) hydrocracker, a hydrogen plant for the new cracker as well as upgrading the existing 45,000 bpd hydrocracker to produce low sulphur diesel.