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SAUDI NATURAL GAS INITIATIVE
Opening of three giant gas fields fosters big petrochemical dreams
PATRICIA SHORT
The Saudi Arabian government has opened three giant natural gas fields to foreign investment, selecting eight international oil conglomerates to help develop the fields. The selection is all part of what has been dubbed the Saudi Arabian Natural Gas Initiative, estimated at about $40 billion, and is the largest opening out to foreigners in Saudi Arabia since the early 1970s.
As Middle East experts at Shell Chemicals point out, it is still far too early in the multi-billion-dollar master plan to have much project detail, let alone detail about potential tag-along chemical projects. However, chemical industry observers are drooling because they know that where there is natural gas, petrochemicals will follow. And where natural gas is big, petrochemicals are big as well.
The Saudi government approved three core projects to be developed by consortia made up of various partnerships among ExxonMobil, Royal Dutch/Shell, BP, Phillips, Enron, Occidental, TotalFinaElf, and Conoco. Two projects are in the area of the great Rub' al Khali desert, or "Empty Quarter," and the third is along the Red Sea coast in the northwest part of the country.
According to the 2000 Statistical Review of World Energy, published last June by BP, at the end of 1999 Saudi Arabia had proven natural gas reserves of 204.5 trillion cu ft. By comparison, Iran had reserves of 812.3 trillion cu ft, and the Russian Federation, 1,700 trillion cu ft. The U.S. had 167.2 trillion cu ft of proven reserves.
Meanwhile, the privately held Saudi Arabian Petroleum Co. (Sapco) has signed a memorandum of understanding with the Egyptian Ministry of Petroleum and Egypt's Petroleum Corp. to set up a joint giant petrochemical plant in Egypt's Alexandria province. The project, budgeted at $550 million, will have a projected capacity of 300,000 metric tons per year
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