DAMMAM, 19 May 2004 — The first Saudi Arabian International Gas Conference, which concluded here on Monday, stressed the importance of further development in the industry in order to cover the Kingdom’s power generation needs and supply the rapidly growing petrochemical industry.

More than 600 delegates and hundreds of participants from the region as well as abroad attended the three-day meeting opened by the Eastern Province Governor Prince Muhammad ibn Fahd, amid tight security at the Eastern Province Chamber of Commerce and Industry here on Saturday. All three consortiums recently awarded exploration rights in the Rub Al-Khali were represented during the conference.

The hallmark of the conference was the open and frank panel discussions on issues like taxation, fiscal returns and security. Chamber Chairman Abdul Rehman Al-Rashid said that the conference was a meeting place between the representatives of international oil companies, contractors, local companies, service providers and suppliers of equipment and accessories to the gas industry. “It was a perfect platform for these players to discuss the business potential growing in the Saudi gas sector,” he said.

The conference had seven sessions and each followed by a panel discussion.

The adviser at the Ministry of Petroleum and Minerals, Prince Faisal ibn Turki, said the conference was a true reflection of the huge growth in the gas sector and hoped that the deliberations at the conference would lead the way for the smooth implementation of the new gas ventures.

Prince Faisal’s presentation, which outlined the Kingdom’s gas sector strategy, set the tone for the event. He said gas was a very important factor in the Saudi economy, contributing SR100 billion to the national exchequer and representing 15 percent of the country’s GDP. The sector provided more than 150,000 jobs including 35,000 direct jobs, he said, with projected industrial investments using gas during 2006 to 2009 expected to be about SR75 billion. He said the new projects would be 75 percent Saudized by their third year of operation.

The contracts recently signed with foreign partners would also give a boost to the national industry as the contract terms state that in the process of commissioning the projects, the international oil companies will buy 40 percent of their products from the domestic market.

Prince Faisal said the gas needed to supply the growing petrochemical industry would not come from these new ventures (in Rub Al-Khali). “The gas allocated for the next five years is mainly from Hawiyah and Haradh”, he said adding that the production from the new ventures will create a new wave of projects,

Khalid Al-Falih, vice president, new business development at Saudi Aramco, gave a presentation on the history of petrochemical industry in the country and its phenomenal growth. He said then industry only had investments of SR1.875 billion in the 1970s but climbed to SR75 billion by 2000. At present, Al-Falih said, there was 235 trillion cubic feet of proven reserves, 60 percent of which was associated with oil and 40 percent non-associated.

He said the new mega projects will add more than SR11 billion to investments made by Saudi Aramco for the production of ethane and NGL.

There were also presentations on the investment opportunities borne out of the planned gas ventures and their financing.

Earlier, during the inaugural session Petroleum and Mineral Resources Minister Ali Al-Naimi said once the new gas projects go on stream, the increase in production will open a new source of revenue for the Saudi economy and create thousands of new jobs. He said the new projects would also provide excellent business opportunities to the local private sector.

“The Kingdom’s objective for these investments is to increase its gas reserves; to increase production and meet development requirements and to diversify income sources.”

He hoped that the new investments in the gas sector would enhance gas production in the country and be able to handle the expected growth in demand for gas. By 2025, demand is expected to hit 12 billion cubic feet per day.

The conference also sent a clear message to domestic and international investors that Saudi Arabia is evaluating its gas resources and consumption and will seek more gas ventures if the need arises.

One of the main concerns voiced by the foreign investors was the issue of security and in this regard, assurance came from the Governor of the Eastern Province Prince Muhammad ibn Fahd. Prince Muhammad assured businessmen and international investors that the country was determined to curb all such elements, which were detrimental to the national growth and development. He said the guiding force of the country was Islam, which firmly stood against terrorism.

Participants admitted that the comments of the governor “were very reassuring” and the security around the venue reflected the determination of the country to take all precautions for the safety and security of its people in general and the business in particular.