Saudi gas opening threatened by price

摘要

Saudi Arabia’s low domestic gas price is threatening the viability of its 10-year-old gas opening, as foreign firms struggle to develop unconventional gas discoveries. Saudi Arabia’s gas exploration opening in 2003-04 saw six foreign firms conclude partnerships with state-owned Saudi Aramco in four permits in the Rub al-Khali desert. But the domestic gas price, capped at 75￠/mn Btu, is contributing to the gradual failure of the opening. Deal terms allow the foreign partners to sell any natural gas liquids discovered at international market prices. But Saudi Arabia prohibits gas exports, so the gas would have to be sold domestically.