Luberef, Aramco sign MoU to assess base oil plant at Jazan refinery

Saudi Aramco Base Oil Co. (Luberef) said it signed a memorandum of understanding with Saudi Aramcoto explore potential cooperation on developing a base oil production facility at the Jazan Refinery and Petrochemical Complex.

Under the MoU, the parties will assess the feasibility of establishing a base oil manufacturing plant at the Jazan Refinery. The proposed project would require the supply of unconverted crude oil from Saudi Aramco as feedstock. The agreement sets out a framework for conducting technical, commercial, and operational studies during the early stages of development.

Luberef said the initiative is a key step in its Group III+ project, which aims to expand the company’s production capacity.

The MoU is non-binding and will run for 18 months from Jan. 1, 2026, with the option to extend by mutual agreement.

The company said it will disclose any future developments, including final approvals, binding agreements, or potential financial impacts, in line with applicable regulatory requirements.

Luberef added that the MoU does not entail any financial obligations for either party at this stage and that no financial impact can currently be determined. Any material impact will be disclosed if binding agreements are reached.