logo

Al-Mady: US is awash in natural gas, and Sabic needs to participate

By: Don Loepp

February 11, 2013

For anyone who wonders why shale gas is such a big story for the global plastics industry, consider this math. In 2008, US natural gas cost about $13 per million Btu, today it's about $3.75.

What a difference five years makes.

Mohammed Al-Mady, vice chairman and CEO of Saudi Basic Industries Corp., is among the global petrochemical company executives who's dealing with the changing market.

Back in 2007, when his company bought GE Plastics, analysts might have bet that Sabic's low-cost feedstock supply in the Middle East would eventually mean international expansion at the expense of investment in North America.

Today the shoe is on the other foot.

In an extensive interview today on ArabianBusiness.com ("SABIC interview: Mohammed Al-Mady"), the CEO shares his thoughts on the market.

The part that jumped out at me: Al-Mady said it was "important that we participate" in the growth of the U.S. petrochemical industry, adding that Sabic is already in talks with companies in the United States, with the aim of either forming a joint venture or towards making an investment on its own.

That doesn't mean Sabic is going to become a major commodity resin supplier in North America. But it's interesting to see how the company is putting an emphasis on the U.S. market for future investment.