NPRA ’11: Saudi Arabia to hike natural gas prices in 2011 - source

28 March 2011 00:38  [Source: ICIS news]

Natural gas is widely used for domestic consumption though it is source of petrochemicals in Saudi ArabiaSAN ANTONIO, Texas (ICIS)--Saudi Arabia is expected to adjust prices of natural gas this year due to dwindling supply, which will likely nudge up production costs for petrochemical producers, an industry source said on Sunday.

Strong availability of natural gas in Saudi Arabia in the past has made domestic producers more competitive against their counterparts in Asia and Europe that use the more-expensive naphtha as feedstock for petrochemical production.

The exact schedule for adjusting prices and the magnitude of the increase have yet to be decided but Saudi Arabia is sure to raise natural gas prices in 2011, said the source on the sidelines of the International Petrochemical Conference (IPC).

The country’s natural gas price is currently at a very low $0.75/mm btu (British thermal unit). On 25 March, US natural gas prices were quoted at $4.403/mm btu.

Saudi Arabia produces 2,770btu/day (bn cubic feet/day) of natural gas, according to a February report by Bloomberg Businessweek.

Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.

Additional reporting by Prema Viswanathan

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