Saudi Aramco Base Oil Company (Luberef) signed a memorandum of understanding (MoU) with Saudi Aramco to explore potential cooperation in developing a base oil production facility at the Jazan Refinery and Petrochemical Complex.
Feasibility Studies Under Early-Stage Framework
Under the MoU, the two companies will jointly assess the feasibility of establishing a base oil manufacturing plant at the Jazan Refinery. In particular, the agreement provides a structured framework for conducting technical, commercial, and operational studies.
These studies are carried out during the early stages of project evaluation.
Feedstock Supply from Saudi Aramco
As part of the proposed concept, the project would rely on the supply of unconverted crude oil from Saudi Aramco as feedstock. This integration will support efficient base oil production and leverage the strengths of both companies.
Supporting Luberef’s Group III+ Growth Strategy
Luberef noted that the initiative is an important step in its Group III+ expansion project. The project aims to increase base oil production capacity and strengthen the company’s position in high-performance lubricant markets.
Non-Binding Agreement with Defined Timeline
The MoU is non-binding and will remain in effect for 18 months from January 1, 2026, with an option for extension by mutual agreement. At this stage, the agreement does not create any financial obligations for either party.
Regulatory Disclosure and Financial Impact
As reported by argaam.com, Luberef clarified that no financial impact can currently be determined. However, the company will disclose any material developments, including final approvals, binding agreements, or financial implications. All disclosures will follow applicable regulatory requirements.
