Saudi Aramco Base Oil, also known as Luberef, plans to close its 275,000 t/yr Group I base oils plant at Jeddah in 2026 when the current land lease expires.The closure would follow the planned start-up of expanded production at its Yanbu base oils plant in 2025, the refiner said in its initial public offering (IPO) prospectus..Luberef plans flexible Yanbu Group III output.Luberef is selling as much as 29.7pc of the company through the IPO..Saudi Aramco Base Oil gets IPO approval.The Jeddah plant produces Group I SN 150 and SN 500.Its de-asphalted oil is taken to Luberef’s Yanbu base oils plant, where it is used to produce Group I bright stock. Some of its light vacuum gasoil is also used as a feedstock at the Yanbu plant.Luberef expects feedstock currently supplied to the Jeddah plant to be reallocated to its Yanbu refinery following its closure.It expects interim feedstock supply to be arranged for the Yanbu plant following the start-up of its expanded units in 2025 and before the closure of the Jeddah refinery in 2026.The main feedstock for the Jeddah plant is reduced crude oil sourced from Arab light crude and supplied by Saudi Aramco.Luberef may reconsider this plan if the land lease at Jeddah were to be extended and other feedstock arrangements were made available.The planned closure of the Group I plant would add to a growing number of such closures in recent years.Increasingly stringent lubricant specifications have cut demand for Group I base oils and instead increased blenders’ requirements for premium-grade supplies.Eneos’ 225,000 t/yr Group I base oils plant in Japan was closed at the end of the third quarter of this year. Another Group I plant in Japan is set to be closed within the coming year.The plant closure in Japan follows the closure last year of several Group I base oils units in Europe..Saudi Aramco Base Oil targets as much as $1.32bn from IPO
