01/28/2015

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SAUDI ARABIA: Sabic is undeterred by lower oil prices; plans for expansion projects continue

Al-Mady, noting that his company considers a 20-year forecast on oil price trends for its long-term investments, said he believes the price decline will be temporary. "The price of natural gas, which Sabic depends on for feedstock, remains stable and is of competitive advantage to us. Nevertheless, we could expect a drop in the price of end products in the near term because of lower oil prices,” he explained. "This is expected to be minimal because of healthy operating rates in the industry. Low oil prices usually stimulate economic growth, so we expect demand to improve while the oil price remains low.” Sabic is completing preliminary studies for the world's first oil-to-chemicals complex in Saudi Arabia. The complex, expected to use 10-million t/y of crude oil, would likely come on stream by the end of 2019. The company is also considering investments in China and the U.S., where gas supplies are more abundant. Additionally, Sabic has started modifying its Teesside, England, cracker to use U.S. shale gas. That project is due to be completed in 2016. Source: Weekly "PetroChemical News", Durham, NC, USA; 19 Jan 2015
(Syed Rashid Ali, Karachi, Pakistan)

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