YANBU, KSA: Saudi Aramco Base Oil Company – Luberef has signed a supply agreement with Saudi Aramco Mobil Refinery Company (SAMREF) to receive at least 3000 barrels per day of Heavy Vacuum Gas Oil (HVGO), subject to product availability.
The agreement, which is part of Luberef’s business transformation initiative and aligns with Saudi Aramco’s transformation initiative for its joint ventures, will be effective from January 25, 2024 and will last for five years, with an option to renew for another five years, unless terminated by either party.
The HVGO will be used as feedstock to produce base oils and by-products at Luberef’s Yanbu facility. The product price will be based on an agreed formula and linked to market prices.
Luberef expects a positive financial impact from the second quarter of 2024, which will depend on the base oil market prices. The HVGO volumes are expected to increase Luberef’s base oils production by about 96,000 metric tons per year of heavy grades of Group II base oils, which have higher values and demand in the market.
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