Saudi Aramco Base Oil Co. (Luberef) has received notice from Saudi Arabia’s Ministry of Energy regarding the extension of feedstock allocation for its facilities.

The extension was agreed on December 1, according to Argaam, with Luberef highlighting that the supply of 24,500 barrels per day (bpd) of crude for its Jeddah facility had now been approved to continue until December 31, 2030.

According to Luberef, the decision to extend supply is key in allowing operations to continue at Jeddah.

Furthermore, the period of crude allocation for Luberef’s Yanbu plant has also been increased, with a supply of 50,000 bpd allowed to go ahead by the ministry until January 31, 2038.

The supply allocated to Yanbu has also been increased and is set to climb to 65,000 bpd until November 30, 2026.

“[This] increase supports strategic goals under [our] second expansion project,” Luberef noted, adding: “Any further developments will be announced in accordance with applicable regulations.”

Earlier this year, President and CEO of Luberef Samer Al-Hokail said that the company would be focusing primarily on completing the Yanbu Growth II project, according to Zawya, with plans initially gaining steam in 2023 – when Luberef awarded a $148.55mn Engineering, Procurement and Construction (EPC) contract to Egypt’s Petrojet. The Yanbu Growth II expansion was expected to increase the facility’s capacity to produce more Group II and III base oils capacity to 1.3mn metric tonnes per year by 2025, allowing it to meet growing market demand.

Al-Hokail previously remarked that the project was a “cornerstone of [the company’s] expansion strategy” in a 2024 results statement. With the continued supply of feedstock from the ministry, these targets seem to have the necessary support.

According to the CEO, the project is expected to allow Luberef to produce Group III base oils, which would turn the company into the region’s only producer of all three groups. Notably, the project will also allow Luberef to improve its production flexibility – allowing it to take advantage of new opportunities in lubricant markets and improve its utilisation capacity.