MOSCOW (MRC) -- Saudi Basic Industries Corp. (Sabic), one of the world's largest petrochemicals groups, is targeting North America for the shale gas needed to fuel growth at one of the world's largest petrochemicals groups, its chief financial officer said on Tuesday, reported Hydrocarbonprocessing.
The company has said previously that a shortage of natural gas was stifling its domestic growth and forcing it to look at foreign investment opportunities.
The US shale gas industry has increased output in recent years, and Sabic signed its first deal for US shale gas last year for use at its Teesside petrochemical plant in Britain.
"In terms of industry growth, we see growth chasing where feedstock is competitive, and the US is top of the list," Mosaed al-Ohali told Reuters.
Saudi petrochemicals businesses have benefited in the past from feedstock subsidies that are being phased out as the government looks to bridge a substantial budget deficit after oil's two-year downturn.
The Saudi government raised gas prices for petrochemicals feedstock from USD0.75/MMBtu to USD1.75 for ethane and USD1.25 for methane, which some industry watchers say is not far from US natural gas prices.
US natural gas prices for April at the Henry Hub benchmark in Louisiana fell to their lowest level for the month since 1995, averaging USD1.90/MMBtu.
Sabic is also focusing on oil-to-chemicals operations, with Ohali saying that the company views its planned USD30 billion Yanbu project as a "fertile opportunity".
He added that SABIC is also looking at technologies such as coal-to-chemicals in China but gave no further detail.
Sabic will stick to its main chemicals products, Ohali said, but it will support small and medium enterprises (SME) to move further downstream through Saudi Arabian Industrial Investments Co. (SAIIC), its joint venture with Saudi Aramco and the Public Investment Fund.
As MRC informed previously, in January 2016, Sabic reported a 29.4% drop in fourth-quarter net profit due to lower prices for its products, particularly in its metals division. It was the sixth straight quarter of falling profits for the company, which has been hurt by the fall in oil prices since mid-2014. SABIC made a net profit of 3.08 billion riyals (USD821 million) in the three months to Dec. 31, down from 4.36 billion riyals in the year-earlier period.
Saudi Basic Industries Corporation (Sabic) ranks among the worldпїЅs top petrochemical companies. The company is among the worldпїЅs market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
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