The rapid increase in natural gas demand for power generation and industrial development tin past decades has put pressure on natural gas supply in Saudi Arabia. While developments are underway to ramp up domestic natural gas production, supplementing domestic supply with LNG imports becomes an option for the Kingdom. There has been rising interest in potential LNG imports to Saudi Arabia lately and no comprehensive research work has been published to our knowledge assessing this option and its consequences.
KAPSARC’s past studies indicate that in the absence of LNG imports, the projected long run marginal value of domestic gas in Saudi Arabia ispotentially$9/MMBtu.Opening up the economy for imports challenges gas pricing mechanisms and potentially enable more consumption within the Kingdom. Also, LNG prices are influenced by different global market configurations that can change the appetite for imports in Saudi Arabia.
Thus, the objective of this project is to investigate the value LNG imports for Saudi Arabia’s economy.