Luberef extends Jeddah facility land lease with Aramco to 2030

Logo of Saudi Aramco Base Oil Co. (Luberef)

Saudi Aramco Base Oil Co. (Luberef) said it extended its utilities services agreement, which includes the land lease for its Jeddah facility, with Saudi Aramco until Dec. 31, 2030, with an option to renew.

The extension agreement was signed on Aug. 9 and covers the period from July 1, 2026, to Dec. 31, 2030.

Luberef said the annual land lease amounts to SAR 1.02 million, while utility service charges will continue to be calculated according to the rates specified in the agreement.

The company said there is no change to the pricing terms, and the financial impact of the extension will be recognized from July 1, 2026.

Saudi Aramco is a related party to the agreement, and Luberef said it received the signed contract from Aramco on Aug. 10.

The company said the extension secures the arrangements needed to ensure the continuity of operations at its Jeddah facility, in line with its long-term strategy and continued production of Group I base oils.

According to Argaam data, Luberef said in its prospectus that, under its board-approved business plan, it intended to close the Jeddah production facility in 2026. The closure could involve either a complete shutdown and demolition of the facility or its decommissioning and preservation, subject to an agreement with the landlord, Saudi Aramco.

The company also said it could reconsider the plan if the land lease for the Jeddah facility were renewed and alternative arrangements for the facility became available in the future.