EPCA '03: High US gas costs to persist for several years

28 September 2003 13:39  [Source: ICIS news]

MONTE CARLO, Monaco (CNI)--The historically high cost of natural gas feedstocks in the US will remain a problem for several years, according to Marc Nagele, global sales manager for specialty chemicals with the Chevron Phillips Chemical (CPChem) joint venture.

Nagele, who was speaking here on the sidelines of the European Petrochemicals Association (EPCA) annual meeting*, said prices  are likely to remain above $4/m Btu for the next few years. "We're not going to see $3 gas anytime in the near future," he said.

Chevron Phillips is heavily dependent upon gas feedstocks for its specialty chemicals business and Nagele estimated that the recent spike in prices probably has added about 10% to costs.

Nagele said the increase in prime feedstock costs already has forced a deeper focus on efficiency programmes and would continue to drive the search for even greater economies.

He stressed that Chevron Phillips, which sells more than 400 products, is focused on being the low-cost producer in the major markets in which it competes. Like most of its competitors, Chevron Phillips is looking to Asia for above-average underlying demand growth. But Nagele said his company is also benefitting from changes in environmental legislation, especially new rules mandating auto engine fuels with much lower emissions.

By: Neil Sinclair
+44 20 8652 3214

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