Saudi Arabian base oil refiner Luberef and national oil company Saudi Aramco are evaluating the feasibility of an API Group III base oil manufacturing unit at the Jazan refinery and petrochemicals complex in southwest Saudi Arabia.
Luberef currently operates two base oil facilities in the Kingdom: an 883,000 metric tons per year Group I and II plant at Yanbu and a 266,000 t/y Group I plant at Jeddah.
The assessment, which began on Jan. 1, provides an 18-month evaluation window covering technical and commercial viability. While no investment commitment has been disclosed, the initiative supports Luberef’s Saudi Group III base oil growth strategy and deeper integration into the refining value chain.
What was disclosed “frames a feasibility-style assessment for a potential base oil facility inside the Jazan Refinery and Petchem Complex,” Gyula Toth, a senior specialist in market intelligence and downstream planning, told Lube Report.
While no investment commitment has been made, the initiative aligns with Luberef’s broader Group III growth strategy and signals a deeper integration into the refining value chain rather than a standalone lubricants add-on.
“It sits alongside, not inside, the Yanbu Growth II expansion storyline,” Toth said.
The planned facility would use unconverted crude oil feedstock, a heavy fraction remaining after hydrocracking with lower sulfur and nitrogen levels. This feedstock offers flexibility in crude selection and can be upgraded into high-quality Group III base oils or further processed.
As European lubricant formulations continue to migrate toward higher-performance base stocks for modern low-viscosity grades and original equipment manufacturer approval stacks, a Middle Eastern source of Group III base oils could offer logistical and supply-chain advantages compared with northeast Asian producers, Toth explained.