At the end of December, Platts reported that Saudi Arabia increased the price of gasoline, domestic gas for power generation and ethane feedstock in its 2016 budget, part of a broader program to cut subsidies and reduce its budget deficit. As a part of this, the ethane price more than doubled from the long-standing fixed price of $0.75/MMBtu to $1.75/MMBtu, according to the official Saudi Press Agency. So what does this mean for Saudi Arabia’s position as the world’s lowest-cost ethylene producer? Setting the stage According to Platts Analytics, Saudi Arabia has 13 steam crackers currently operating with a total ethylene capacity of 15.7 million mt/year. For 2016, we expect capacity to reach 16.9 million mt with the start of the 1.5 million mt/year Sadara cracker. Additionally, the country will have a full year of production from the Petro-Rabigh unit 2 cracker, which started up in mid-2015. The largest facility in the country is the 2.45 million mt/year Petrokemya steam cracker in Al Jubail. The facility has a naphtha-based cracker with a capacity of 700,000 mt/year (Unit 1), an ethane/propane mix cracker with a capacity of 950,000 mt/year (Unit 2), and an ethane-based cracker with a capacity of 800,000 mt
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Source: CTRM Center