According to the Oil and Gas Journal, Saudi Arabia has proven natural gas reserves estimated at 258 trillion cubic feet (Tcf), fourth largest in the world behind Russia, Iran, and Qatar. Over 5 Tcf was added in 2008, and over the last decade and a half, Saudi Aramco has added about 75 Tcf of non-associated reserves.

However, the majority of the gas fields in Saudi Arabia are “associated” with petroleum deposits, or found in the same fields as crude oil, and plans to increase production of this type of gas remain linked to an increase in oil production. The majority of new natural gas discovered in the 1990s has been associated in light crude oil, especially in the Najd region south of Riyadh. About 57 percent of Saudi Arabia's proven natural gas reserves consist of associated gas at the giant onshore Ghawar field and the offshore Safaniya and Zuluf fields. The Ghawar oil field alone accounts for approximately one-third of the country's proven natural gas reserves.

Rapid reserve development is necessary for Saudi Arabia’s plans to fuel the growth of the petrochemical sector, as well as for power generation and for water desalination. According to Saudi Aramco forecasts, natural gas demand in the kingdom is expected to more than double to 14.5 billion cubic feet per day (Bcf/d) by 2030, up from an estimated 7.1 Bcf/d in 2007. In order to free up petroleum for export, all current and future gas supplies (except natural gas liquids) reportedly remain earmarked for use in domestic industrial consumption and desalination.

However, natural gas production (estimated at 2.7 Tcf in 2007 remains limited, as soaring costs of production, exploration, processing and distribution of gas have squeezed supply, while an estimated 13 to 14 percent of total production is lost to venting, flaring, reinjection and natural processes according to OPEC and other sources. Saudi Arabia has no net imports or exports of natural gas. According to Saudi Aramco, only 15 percent of Saudi Arabia has been "adequately explored for gas".

Although most of its natural gas reserves are from associated gas, Saudi Arabia is not likely to boost its gas production from these reserves because of OPEC crude oil production restraints. To meet growing domestic needs for additional production, the Petroleum Ministry and Saudi Aramco announced a $9-billion strategy to add 50 Tcf of non-associated reserves by 2016 through new discoveries (and potentially another 50 Tcf of associated reserves). According to Saudi Aramco, exploration and development will also commence in non-producing areas such as the Red Sea, northern and western Saudi Arabia, and the Nafud basin, north of Riyadh.

Saudi Aramco has focused on offshore fields in the Persian Gulf in its current 5-year plan to expand its natural gas production. Three non-associated gas fields have been targeted:

The Arabiyah and Hasbah fields are believed to contain high- sulfur natural gas that will be sent to be processed at the Kursaniyah gas hub. These high sulfur levels, as well as their offshore location, will make this gas relatively expensive to develop.

In response to these new upstream developments, a major expansion of natural gas and natural gas liquids processing capacity from 9.3 Bcf/d to 12.5 Bcf/d is underway at Khursaniya, Hawiya, Ju'aymah,Yanbu, and Khurais to process increases in production.

Another large non-associated offshore natural gas field, Dorra (Durra), is located offshore near Khafji oil field in the Saudi-Kuwaiti Neutral Zone. Plans to develop Dorra have been controversial since the late 1960s, however, because 70 percent is also claimed by Iran (called Arash). In addition, the maritime border between Kuwait and Iran remains un-demarcated. Saudi Arabia reached an agreement with Kuwait in July 2000 to share Dorra output equally, although the Kuwaitis are reportedly trying to purchase the Saudi share. According to Saudi Aramco, the field is estimated to contain non-associated gas reserves of between 35 and 60 Tcf of natural gas, and is under seismic study. The Kuwaiti Ministry of Oil has reported that the goal is to produce initially 600 MMcf/d from Dorra. Kuwait and Iran have intermittently discussed jointly developing the field, although production plans remain undisclosed.

The Saudi domestic natural gas market, traditionally the sole domain of Saudi Aramco, is slowly being opened to private investment both in exploration and distribution, and increasing competition in the market. The backbone of the non-associated gas exploration strategy relies on foreign consortiums exploring for onshore gas and condensate (natural gas liquids) in the Rub al-Khali, which officials hope will produce some 2 Bcf/d by 2011, although success has been limited.

Saudi Arabia has four upstream joint ventures in the Empty Quarter:

The consortia were required to drill 27 exploratory wells by the end of the first exploration period ending in 2009. To date, these ventures have not made significant commercial discoveries. SRAK’s 4th unsuccessful well, Kidan-6, was reportedly among the most expensive onshore wells in industry history.

In addition to facing domestic supply shortages, Saudi Arabia has also come under pressure internationally for its subsidized natural gas prices. Generally, the price for natural gas for industrial and petrochemical use is set by the ministry at $0.75 MMBtu, some of the lowest in the Gulf. This low price was set when most of Saudi Arabia’s gas production came from inexpensive associated gas, but is inconsistent with the much more expensive high-sulfur gas production coming from offshore fields expected to cost from $3.50 - $5.50 MMBtu. The low natural gas price is also a challenge to the foreign operators in the Kingdom looking to discover and exploit resources in the Empty Quarter.

Saudi Arabia currently has seven gas processing plants with a total gas production capacity of approximately 9.3 Bcf/d, including 1 million bbl/d of natural gas liquids (NGLs) and approximately 2,700 tons of sulfur at facilities Berri, Shedgum, Uthmaniyah and Hawiyah. According to statements made by Saudi Aramco, the country is expanding processing capacity to 13 Bcf/d, with projects underway at Khursaniya, Hawiya, Ju'aymah,Yanbu’, and Khurais.

Domestic demand, particularly the delivery feedstock to petrochemical plants, has driven consistent expansion of the nearly 8.0 bcf/d Master Gas System (MGS), the domestic gas distribution network in Saudi Arabia first built in 1975. Prior to the MGS, all of Saudi Arabia's natural gas output was flared. The MGS feeds gas to the industrial cities including Yanbu’ on the Red Sea and Jubail.

In order to feed the expanded gas processing facilities, several additions to the MGS are in the planning or construction phases. The largest pipeline to be built is the 132-mile conduit to the Rabigh complex and the existing Yanbu’ NGL processing facility. Installation of four pipelines, totaling some 62-miles will connect Manifa to KGP and Ras az-Zour for gas processing and raw power production. This is part of a broader expansion of the existing gas transmission system in Saudi Arabia, reportedly to include the construction of around 1,200 miles of additional natural gas pipeline capacity (on top of 10,500 miles of oil, gas, and condensate, products, and natural gas liquid pipelines currently in operation).