DUBAI, United Arab Emirates – Luberef yesterday formally announced a major expansion of its refinery in Yanbu al Bahr, Saudi Arabia, to produce 700,000 metric tons per year of API Group II base oil.
In addition to the new Group II plant, scheduled for completion in the third quarter of 2015, Luberef will also increase bright stock output at Yanbu from todays 84,000 to 175,000 t/y.
For 35 years, Luberef has been at the fore of the base oil industry in the Middle East, Ali A. Al-Hazmi, Saudi Aramco Luberef Co. president and CEO, told the ICIS Middle Eastern Base Oils & Lubricants Conference here. It is my pleasure to officially announce our plan to expand our refinery at Yanbu, which will increase our combined capacity to over a million metric tons per year.
Demand for Group II is forecast to account for 25 percent of total global demand for base oils by 2020, and is expected to exceed 30 percent of total demand by 2030, said Ibrahim A. Al-Faqeeh, Luberef vice president for manufacturing. So Luberef will make Group II and will be able to make Group III. He added that the project could cost around U.S. $1 billion, although final cost estimates have not been announced.
Luberef currently operates two Group I plants on Saudi Arabias Red Sea coast, in Jeddah and Yanbu, with combined capacity of about 600,000 t/y, of which 84,000 tons is bright stock.
With the Yanbu expansion, Luberef production capacity is projected to be 708,000 t/y of Group II; 68,000 t/y of drilling oil; and 441,000 t/y of Group I, of which 175,000 tons will be bright stock.
Luberef has begun the front-end engineering design phase in Yanbu, Al Faqeeh said. The expansion, which will use Chevron Lummus Global technology, will add a hydrocracker unit, an Isodewaxing unit, hydrogen and hydrogen-recovery units, a sulfur recovery unit and a gas treatment unit.
Al-Faqeeh estimated the project cost at around U.S. $1 billion. Marketable byproducts will include ultra-low-sulfur diesel, marine heavy fuel oil, naphtha, asphalt and sulfur.
Along with the expansion, Luberef also said it plans to extend its markets beyond serving domestic blenders and the Middle East Gulf region. The Indian subcontinent, Europe and Turkey, and China and Southeast Asia are among the companys newly targeted markets.
President Al-Hazmi unveiled a new company logo at yesterdays presentation, as part of the companys commitment to keeping the world in motion. It is a symbol that reflects our commitment to leadership, excellence and global reach, he said.
Luberef, headquartered in Jeddah, is 70 percent owned by Saudi Aramco and 30 percent by Jadwa Industrial Investment Co.