Posted on 04/21/2014 10:46:13 AM PDT by thackney
Petrochemicals giant Saudi Basic Industries Corp (SABIC) is finding it very hard to grow within Saudi Arabia because of a shortage of natural gas, its chief executive said on Sunday.
Mohamed al-Mady was speaking to reporters after the company reported that net profit slipped 1.8 per cent from a year earlier in the first quarter of this year as lower product prices offset rises in production and sales volumes.
“The shortage of gas and many sectors competing for it have made internal expansion very hard,” Mady said.
However, he noted that SABIC had several domestic projects under construction, including a synthetic rubber plant at its KEMYA joint venture that would come on line in two to three years.
(Excerpt) Read more at gulfbusiness.com ...
Natural gas
Saudi Arabia has the world’s fifth largest natural gas reserves, but natural gas production remains limited.
http://www.eia.gov/countries/cab.cfm?fips=SA
Production and consumption
Saudi Arabia does not import or export natural gas, so all consumption must be met by domestic production. According to Saudi Aramco forecasts, natural gas demand in the Kingdom is expected to almost double by 2030 from 2011 levels of 3.5 trillion cubic feet (Tcf) per year.
Rapid reserve development is necessary for Saudi Arabia’s plans to fuel the growth of the petrochemical secto, as well as for power generation and for water desalination. All current and future gas supplies (except natural gas liquids) reportedly remain earmarked for domestic use, in part to minimize the use of crude oil for power generation. However, natural gas production remains limited, as soaring costs of production, exploration, processing, and distribution of gas have squeezed supply. OPEC estimates that 13 to 14 percent of total production is lost to venting, flaring, reinjection and natural processes.
It is expensive.
And it doesn’t help as much with some of the PetroChem ventures.
They are losing money if they don’t value it at the market price.
It is a loss of income. Why would they do that?
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