“It is too early to say what quantities we are looking at but there is a sense of excitement in our drilling team,” says a source at China Petroleum & Chemical Corporation (Sinopec).

The Sino Saudi Gas consortium, a joint venture of Sinopec International Petroleum Exploration & Production Corporation (80 per cent) and Saudi Aramco (20 per cent), is finishing tests on its second well in the Empty Quarter.

Sinopec expects to announce the positive results at its board meeting in early January.

The source says the well has produced its first flow of gas and the group will now consult with Aramco to develop the discovery.

Sino Saudi Gas is one of four consortiums searching for gas in the Empty Quarter. The others are:

• South Rub al-Khali Company (Srak), comprising the UK/Dutch Shell Group, France's Total and Aramco;

• EniRepSa, comprising Italy's Eni, Spain's Repsol and Aramco;

• Luksar, a joint venture of Russia's Lukoil and Aramco.

Before Sino Saudi Gas's discovery, the four consortiums had drilled seven wells without finding commercial quantities of gas

India's state-owned gas utility, Gail, confirmed it hopes to buy a stake in Lukoil's consortium and expects to enter talks with the Russian firm in the new year.

A Lukoil executive says the firm is looking at ventures with Gail, adding that the two firms held exploratory talks in November.