Luberef Upgrade Awaits OK


Saudi Arabias Luberef is considering an upgrade of its Yanbual Bahr base oil plant but has not made a final decision to proceed with the project.

The project being contemplated would make the facility a producer of API Group II base stocks with capability to make Group III, said an industry source familiar with the proposal. Speaking on condition that he not be identified, the source told Lube Report that the project has not yet been presented to the companys board of directors.

Saudi Aramco Lubricating Oil Refining Co., also known as Luberef, is a 70-30 joint venture between Saudi Aramco, the worlds largest oil producer, which is owned by the Saudi government, and Jadwa Investment, of Riyadh, Saudi Arabia. Headquartered in Jeddah, Luberef owns two base oil plants in Saudi Arabia, both of which make Group I stocks. The Yanbual Bahr facility has capacity to make 5,500 barrels per day. The second plant is located in Jeddah and has capacity of 5,100 b/d.

Mobil took a 30 percent stake in the company when it was formed in 1976, but ExxonMobil sold those shares to Jadwa in 2007.

Reuters reported last week that Luberef plans to spend nearly $1 billion to upgrade and expand the Yanbual Bahr plant.

Base oil plants in the Middle East currently have almost no capacity to produce any grades other than Group I, but several projects are scheduled to introduce large amounts of higher grades in the next few years. A gas-to-liquids plant being built in Ras Laffan, Qatar, by Shell and Qatar Petroleum has been designed with capacity of 30,000 b/d and is scheduled to begin producing Group III oils in 2011. Neste and Bapco plan to open a 7,700-b/d Group III plant that same year in Bahrain.

A joint venture between Fouman Chimie and Sepahan Oil aims to open a 5,200-b/d Group II plant in Bandar Abbas, Iran, in late 2011. Takreer, Neste and OMV have announced a 10,000-b/d Group III project in Ruwais, Abu Dhabi, scheduled to open in 2013.

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