Published By : 06 Nov 2015 | Published By : QYRESEARCH
According to the chief executive of National Industrialization Co 2060 SE (Tasnee) Mutlaq al-Morished, any significant increase in natural gas prices in Saudi will have serious negative impact. The company has interests in metals, chemicals, and petrochemicals in the country and hopes to see the benefits of the restructuring effort after at least 12 months. The restructuring efforts were put to stop profits going downhill. The decrease in oil prices since June last year has impacted the state’s spending in the Arab kingdom. The Saudi government has taken initiatives to stem a budget deficit worth US$100 billion.
The petrochemical sector in the country is already facing the heat with low product prices reducing the industry revenue. Last week, Saudi oil minister Ali al-Naimi stated that the government is thinking over cutting down domestic energy subsidies. According to the estimates by the International Monetary Fund (IMF), the subsidy for natural gas cost the Arab kingdom US$ 11.73 billion in 2014. Morished has cautioned that an increase in natural gas prices beyond 10-15% is going to affect the country’s chemical industry. Tasnee has registered a third straight quarterly loss this year and has been struggling like most other Saudi firms associated with oil and gas sector.
Tasnee is one of the world’s largest producers for titanium dioxide. This year, the company’s struggle can be attributed to the economic slump in China as well as in the other parts of the globe. Morished is hopeful that the restructuring would yield benefits by late 2016 or early 2017. New projects are also lining up. For example, a project in the southern city of Jizan, a plastic project in Hail, and a membrane project in Dammam.