Saudi Arabia is yet to make a decision on any changes to the price it charges for ethane gas, a key component in the country’s petrochemicals industry, according to the country’s Petroleum & Mineral Resources Minister, Ali al-Naimi
Al-Naimi said the kingdom still charges its customers just $0.75 per million British Thermal Units (btu) of the gas. This compares with prices of $3-4btu in the US, another major petrochemicals producer. He was speaking at the Gulf Petrochemicals & Chemicals Association Forum in Dubai on 9 December.
Ethane gas is a key component in the production of the basic chemicals ethylene and propylene. These are used to make the basic plastics polyethylene and polypropylene. Local petrochemicals giant Saudi Basic Industries Corporation (Sabic) is the world’s second largest producer of ethylene-based plastics.
Supplies of the gas have become increasingly restricted in recent years, and state energy giant Saudi Aramco has not signed a new sales agreement for ethane since a deal with the local Saudi International Petrochemical Company (Sipchem) in 2006.
Saudi Arabia had been expected to make changes to the price of ethane, effective from 2012. However, Al-Naimi said a decision is still under review.
“We are in the process of looking at a new pricing mode, although whether this will happen by 2012 I cannot say yet,” said Al-Naimi.
Aramco will add 400 million-cubic-feet-a-day (cf/d) of new ethane gas production between 2009 and 2013, added al-Naimi. Total natural gas production will top 14 billion cf/d by 2020.