Yanbu National Petrochemical Company (Yansab) announced that Aramco has notified them that its grace period for ethane and propane prices extends into 2016. According to the announcement, the company will continue to pay USD0.75/mmbTU for ethane (versus new price of USD1.75/mmBTU) until 4Q2016 and will continue to pay for propane-based on the old formula (28% discount to naphtha) until end of 2Q2015. The release noted that the company now expects only a 1% impact on costs in 2016 versus the previously announced impact of 6.5%.   We had highlighted previously that it is possible Yansab would have some grace period in 2016, although we did not expect this to go beyond mid-2016, so we are positively surprised by the announcement. Yansab has already seen a solid rally in the last two weeks (+22%), but we think this could further catalyse the stock as we have seen similar rallies/outperformance post such announcements recently (Kayan +4.8% versus +0.9% for TASI petchems, Chemanol +0.9% vs +0.33% for TASI petchems, Petrochem +1.5% versus -2.2% for TASI petchems). Depending on when the grace period for ethane will end in 4Q2016, we estimate this could save Yansab cSAR120 – 160 million in 2016.   Are there any other companies left that could benefit from a grace period- Sipchem had already mentioned in its earnings call that it has a grace period of several years for the ethane allocation for the EVA/LDPE project and possibly a few months of grace period on the methane price for the CO plant, but it has not yet announced this to Tadawul, so that could be a catalyst if the company decides to announce it. Petro Rabigh has not made any announcements on grace period yet either, but we expect they will likely have a seven-year and 90-day grace period for the extra ethane allocation (30 million cubic feet per day) granted as a part of the Rabigh II expansion. Sahara could possibly have a few months of grace period for Al Waha, although it is not yet fully clear if this will be the case. Maaden has not made any announcements surrounding grace period yet, but management confirmed on the company’s earnings call that the SAR120 million impact announced on 3 January took all the grace periods into account, if the company announces the grace periods to the market (MPC: 2017, MAC: 2020, Waad Al Shamal: 2023), however, this could still potentially catalyse the stock if the wider market was unaware of how long the grace periods last. Beyond this, we do not see any other likely candidates for a grace period on gas supplies. (Company disclosure, Yousef Husseini)