20 April 2007 09:02 [Source: ICIS news]
By Matt Kovac
The high cost of natural gas as a feedstock for the chemical industry was contributing to plants becoming obsolete, said David Graham, vice president of environment, health and safety at Dow Chemical, on Friday.
“When equipment becomes obsolete then you have to pretty quickly find joint ventures around the world,” he said on the sidelines of a United Nations sponsored environmental summit in
“This comes at the expense of the
Research by bank HSBC Saudi Arabia showed that US Henry Hub gas prices averaged $6.73/m Btu in 2006 and around $7.20/m Btu in the first quarter of 2007, 10 times more costly than in parts of the
Saudi Basic Industries Corp (SABIC), for example, pays 75 cents/m Btu for gas in
The bill is likely to encounter some opposition, particularly to drilling off the coast of
However, the bill may not be enough to solve ageing crackers, which are already close to the limit of their normal operating life.
The HSBC research said the average age of ethylene plants in the
“The decision to close a plant is now a lot easier than it was before, and we already see signals that operators of marginal capacity are looking to exit,” the report said.
“We have the same standards wherever we are in the world and that’s why we are the preferred joint venture partner with governments,” said Graham.
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