From Bloomberg News:
By Wael Mahdi - Nov 12, 2012 10:15 AM ET
Saudi Basic Industries Corp. (SABIC), the world’s largest petrochemical maker, plans to invest in companies in the U.S and elsewhere that have technology to turn shale gas into chemical products.
The amount of natural gas produced from shale is a “game-changer” that will have a large impact on worldwide supplies, Mohamed Al-Mady, chief executive officer of the company known as Sabic, said today in an interview in Jubail, Saudi Arabia.
“It will require Sabic to become more competitive and to participate in the shale-gas boom itself,” he said. “Our strategic focus is to examine shale gas very closely and find very competitive areas where we can invest.”
Growth in U.S. shale-gas exploration and production has lowered domestic gas prices and enables producers there to use gas as feedstock. That has put pressure on petrochemical producers in Saudi Arabia who get gas for a government-subsidized price of $0.75 per million British thermal units. Gas for December delivery traded at $3.513 per million Btu at 10 a.m. on the New York Mercantile Exchange.
Saudi Arabia is increasing output of gas to meet local demand for power generation and to feed petrochemical plants. Saudi Arabian Oil Co., or Saudi Aramco, is exploring for shale gas in northern parts of the country, and has started a venture capital company this year to buy stakes in companies with technology to develop the resource.
With many plants in the U.S. under construction, "it wil take three years or less to see the impact of the shale-gas boom on the petrochemicals industry," al-Mady said. "The world economy is expanding and hopefully, the expansion and future growth in world's economy will absorb new supply of petrochemicals from shale gas."
Sabic’s venture capital arm is looking for opportunities in the U.S., Europe and China to buy stakes in start-up companies that can turn shale gas into petrochemicals, according to Ernesto Occhiello, Sabic Ventures’ executive vice president for technology and innovation.
Formed last November, the Netherlands-based business is negotiating 30 to 40 deals and is looking especially at technologies that use different feedstocks, Occhiello said today in Jubail.
“We believe we will be a leading company from a technology point of view in the utilization of natural gas from shale,” he said.
To contact the reporter on this story: Wael Mahdi in Manama at email@example.com
Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
Rig Count Interactive Map by Baker Hughes, an energy services company.
Shale Sheet Fracking, a Youngstown Vindicator blog.
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Earthjustice, a national eco-group.
People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.
Concerned Citizens of Medina County, a grass-roots group.
No Frack Ohio, a Columbus-based grass-roots group.
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Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.