Luberef amends agreement with Aramco to supply further 5,000 bpd of reduced crude oil

Saudi Aramco Base Oil Co. (Luberef) signed an amendment to its feedstock agreement with Saudi Aramco to supply additional 5,000 barrels per day (bpd) of reduced crude oil (RCO). The agreement was sealed on July 1, 2021. 

In a Tadawul statement, Luberef said this amendment will increase the total quantity of RCO received in Luberef’s Yanbu facility from 45,000 to 50,000 bpd subject to product availability.

The increased RCO supply is part of the business transformation initiative in line with the transformation program launched by Saudi Aramco for its joint ventures.

The amendment will take effect from June 1 under the 12-month agreement, which will be renewed automatically for equal subsequent periods unless terminated by either party pursuant to the termination provisions provided in the main Yanbu feedstock supply agreement.

The positive financial impact is expected to appear starting from Q2 2023, Luberef added, noting that the impact cannot be exactly determined, as it will depend on base oil market prices.

The additional RCO volumes will potentially increase Luberef’s Growth II base oil volumes by around 88,000 metric tons per year, and bright stock volumes by around 5,000 metric tons per year. 

Saudi Aramco is a related party to the deal, Luberef concluded.

Source : Argaam