Recent work has shown the potential usefulness of both magnetic susceptibility and magnetic hysteresis techniques in assessing the effect of fine-grained hematite on permeability, where the hematite was dispersed in the matrix of relatively tight gas red sandstone samples. The present study demonstrates that grain lining hematite cement is also a major controlling factor on permeability in a relatively tight gas sandstone reservoir in the North Sea. Magnetic susceptibility measurements on core plugs in this reservoir showed a strong correlation with probe permeability. Moreover, samples with a higher content of hematite exhibited lower permeability values. Thin-section analysis revealed the presence of a thin (approximately 10 to 15 lm) rim of hematite cement surrounding quartz grains, which block pore connections and reduce permeability. Magnetic hysteresis measurements on representative samples indicated a similar paramagnetic clay content in both the low and high permeability samples, suggesting that the clay (mainly illite) is not the dominant controlling factor that produces the variations in permeability that we observed. Because samples with higher hematite content exhibit lower permeability, it appears that hematite is a major control on the permeability variations seen in this reservoir. Although the paramagnetic clays undoubtedly have an influence on the absolute permeability values (increasing paramagnetic clay content has previously been shown to correlate with decreasing permeability), small amounts of grain lining hematite cement can reduce the permeability significantly further. Analysis of the magnetic hysteresis parameters on a Day plot indicated that the permeability was essentially independent of the hematite particle size for the fine particle sizes observed in this study.