DUBAI, (Reuters) – Abu Dhabi government-owned IPIC has cut the planned capacity for a new oil refinery in the United Arab Emirates to under 200,000 barrels per day (bpd) from 500,000 bpd, IPIC’s managing director said on Tuesday.

International Petroleum Investment Co (IPIC) invests in oil-related projects for the government of Abu Dhabi, the capital of the OPEC member and the emirate which controls more than 90 percent of the UAE’s oil reserves.

“We have reduced the planned capacity to under 200,000 bpd and we are looking to finalise this project within a month,” IPIC Managing Director Khadem al-Qubaisi told Reuters by telephone.

U.S. oil giant ConocoPhillips dropped out of the project last year as costs escalated. IPIC and Conoco first announced plans for a 500,000 bpd refinery on the UAE’s east coast at Fujairah in July 2006.

Soaring costs have led to delays and cancellations for energy projects worldwide.

Qubaisi last year estimated the cost of the new refinery at between $8 billion and $10 billion. IPIC said then it was looking at modifications to the design to boost the plant’s potential profitability, including adding petrochemical units.

IPIC has also signed an agreement with Pakistan to build a $5 billion refinery there that will double Pakistan’s refinery capacity.

Qubaisi said on Tuesday that IPIC will establish a $2 billion investment fund with Qatar Investment Authority (QIA) that could mark IPIC’s first foray into acquisitions outside of the energy sector.