The deal is a series of interlinked contracts worth about $25bn with eight major firms to develop vast gas fields. These firms are: ExxonMobil, Shell, BP, TotalFinaElf, Occidental, Philips, Conoco, Marathon.
After year-long negotiations Saudi Arabia has given last-ditch concessions but western firms are still dissatisfied with high taxes and the amount of access given to the prized gas reserves.
The projects - to be carried out in co-operation with state-run Saudi Aramco for up to 30 years - are also expected to involve the development of power plants, pipelines and water desalination projects.
Saudi Arabia hopes the projects will help convert the country's domestic utilities from oil to gas dependency, freeing up more of the country's crude oil output for export. In addition to the largest oil reserves in the world, Saudi Arabia boasts the world's fourth biggest gas reserves.