Logo of Saudi Aramco Base Oil Co. (Luberef)
Saudi Aramco Base Oil Co. (Luberef) signed a supply agreement to receive 3,000 barrels per day (bpd) of heavy vacuum gas oil from Saudi Aramco Mobil Refinery Co. (Samref) subject to the product availability, according to a statement to Tadawul.
This agreement is a part of a business transformation initiative, aligning with Saudi Aramco’s transformation initiative for its joint ventures (JVs).
The gas oil will be used as feedstock to produce base oils and by-products in Yanbu facility.
The product price is calculated based on an agreed formula, and subject to market prices.
The agreement is effective as of Jan. 25, 2024, and will extend for a period of five years, renewable, unless terminated.
The relevant financial impact will likely appear as of Q2 2024; however, this impact cannot be accurately determined as it depends on the base oil market prices. Heavy vacuum gas oil volumes are expected to boost base oils production by approximately 96,000 metric tons per year of grade II base oils with higher values.
Samref is deemed a related party, the statement added.
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