Lukoil Looking to Explore for Unconventional Gas in Saudi Arabia

Russia's Lukoil is discussing a deal with Saudi Arabia to exploit unconventional gas deposits in the kingdom's Empty Quarter desert region, Reuters reports company's overseas unit as saying.

Saudi Arabia has not been successful in finding commercially viable deposits of conventional gas under the sand dunes.

"The assumptions of the initial gas exploration agreements do not exist anymore because in spite of a decade of exploration, no commercial gas discoveries have been made. Therefore the exploration programme could be redefined as a change to unconventional gas exploration with higher costs and new buy-back terms," said Sadad al-Husseini, a former senior executive at Saudi Aramco, reports Reuters.

According to Reuters Lukoil is still on the hunt for desert gas and is now evaluating the possibility of production from an unconventional deposit.

"This is tight gas. The negotiations are under way. No details on deal and future production plans yet," the news agency quotes a spokesman for Lukoil Overseas as saying.

Saudi official sources told Reuters further studies would be needed to be carried out by Lukoil and Saudi Aramco to estimate how much unconventional gas was available. 

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