Logo of Saudi Aramco Base Oil Co. (Luberef)
Saudi Aramco Base Oil Co. (Luberef) sealed, on April 10, an agreement to receive an additional supply of up to 2,000 barrels per day (bpd) of vacuum gas oil (VGO) from Saudi Aramco, subject to product availability.
In a Tadawul statement today, April 11, Luberef said the 12-month deal, valid as of April 1, is part of its business transformation program, which is in line with Saudi Aramco’s transformation initiative for its joint ventures (JVs).
The extra VGO supply, according to the company, will be utilized as feedstock to produce base oil and by-products at its Yanbu facility. Feedstock supply cost will depend on an agreed formula and is linked to market prices.
This agreement is automatically renewable unless one of the parties decides on its termination via written notice in no less than 60 days.
The positive material impact of the contract will be reflected starting from Q2 2023, which cannot be determined at present as it depends on base oil prices, Luberef added.
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