State oil giant Saudi Aramco has shut down its 90,000 barrel per day crude oil refinery in Jeddah indefinitely, industry sources familiar with the matter said on Sunday.
Aramco had for years been considering whether to shut the refinery because of age and environmental concerns. The facility, which started operating in 1967, served much of the country’s western region and its closure will increase demand at other Saudi facilities.
It produced liquefied petroleum gas, gasoline, diesel, asphalt and jet fuel, and exported naphtha.
One source said the facility would be mothballed.
The shutdown is not expected to cause a shortage of oil products in Saudi Arabia as Aramco will meet demand from other refineries, industry sources said. In 2014 it brought online two refineries which added 800,000 bpd of refining capacity, in Yanbu on the west coast and Jubail in the east.
On the west coast, Aramco is expected to complete the first major unit of a new, 400,000 bpd refinery in Jizan province by the end of this year.
The Jeddah refinery is next to, and supplies feedstock and power to, a base oil refinery run by Luberef, a joint venture between Aramco and Jadwa Industrial Investment Group.
The closure of the Jeddah refinery will not affect Luberef's production of GI base oil and supply to customers will continue, because Luberef is expanding its GI facilities at Yanbu, the chief executive of Luberef said in June.