Saudi Aramco announced Thursday the launch of a base oil marketing business, marking its shift to an active supplier rather than a somewhat passive base oil investor.
The oil titan said it will offer API Group I, II and III base stocks but did not identify their sources.
We are very excited to launch our base oils brands and intend to streamline our base oils strategy, Vice President of International Operations Said Al-Hadrami said in a press release.
The companys website said it will offer Group I oils under the Dura brand name, Group II under the Prime name and Group IIIs as Ultra. Aramco itself has until now not marketed base stocks, though it holds a 70 percent stake in Luberef, which operates Group I plants in Jeddah and Yanbual Bahr, Saudi Arabia and markets the oils they produce. The website indicated that at least some of the Dura oils will come from Jeddah.
Neither the website nor the press release disclosed the source of the Group II and III oils, but Aramco said it is working with affiliates to arrange supply of at least some oils. Aramco would seem to have a few options for Group II. Luberef is in the midst of expanding and upgrading its Yanbu plant to add Group II capacity, along with increase capacity for bright stock. Within a few months, the company expects to become sole owner of the worlds largest Group II plant – the 40,300 barrel per day Motiva facility at Port Arthur, Texas. Motiva is a 50-50 joint venture between Aramco and Shell, but the companies are dissolving and plan to settle on a split during the second quarter of this year. According to a preliminary agreement, Aramco would get possession of the Port Arthur plant..
Finally, Aramco owns a controlling stake in South Korean refiner S-Oil, which operates the worlds largest base oil plant, a 41,000 b/d Group II and III plant in Ulsan, South Korea. S-Oil markets its Group III oils under the Ultra brand name.
In anticipation of its new role, Saudi Aramco said it completed a technical program that tested base oils for 15 different applications, including engine oils.