Other Middle East updates
Egypt has postponed final decision on its first nuclear powered investment, in the aftermath of its own turmoil. It is possible that outside (French, Korean, Japanese, and Russian partners), may also go slow on next steps for projects throughout the region (Kuwait, Jordan, UAE). Roughly twenty projects are in various stages of planning for startups between 2015 and 2025. Late last year, ExxonMobil pulled out of a $6 billion petrochemical project in Qatar. Dow Chemical is concerned about the input costs associated with a $20 billion petrochemical project in Saudi. There is growing concern that the days of low cost natural gas and NGLs are over, as the host countries shift to exploiting non-associated resource. For XOM, the concern extends to a dramatic escalation in basic chemical projects in Asia which, though much higher cost, are positioned to supply thke local markets at which Middle East projects are direted. Added to the US’ renewed position as one of the lowest cost producers of chemicals,. worldwide, and several regional hosts will have to make a choice – subsidize inputs to create more diversity and jobs, or change plans. Stay tuned.
Lastly, Saudi Arabia has signed a $380 million deal, with Hyundai and affiliates, to build a polysilicon plant in the kingdom. Subsidized electricity (over half of variable costs) is, no doubt, a factor in this arrangement. As noted previously, the way Saudi subsidizes electricity with $4 oil and $-0.75 (/mcf) natural gas, the payback from solar PV is around 6 years.