RIYADH, 2 April 2007 — The Kingdom signed a $100 million deal with a Russian company on Saturday for laying an oil pipeline in the Empty Quarter. The agreement was signed in Dhahran between Saudi Aramco and Stroytransgaz, a construction arm of Russia’s energy giant Gazprom.
The project will be fully implemented by the Russian partner, but workers from other countries would also be employed. The proposed Sheyba-Abkayk oil pipeline, whose length exceeds 200 km (124 miles), will start in June and is scheduled to be completed in 18 months. The project is to be carried out in the world’s biggest sand desert, Rub Al-Khali. The first ever contract by a Russian company will be a breakthrough for Russian business to a totally new market, which would provide access to other markets in the Middle East.
Describing Stroytransgaz as a powerful Russian organization, Ali Al-Ajmi, vice president of Saudi Aramco, said the Russian partner has its own advanced technology and a big working experience both in Russia and abroad. He hoped that the first ever deal with a Russian contractor to build oil and gas facilities in Saudi Arabia “will mark the beginning of a long-term mutually advantageous cooperation between the two companies.”
Al-Ajmi signed the document on behalf of the Saudi side. In the rating of top 50 world oil companies, Saudi Aramco holds the first place in terms of oil reserves, production, management quality and technology used, during the past two decades.
It is one of the world’s largest oil and gas associations.
It fully controls all reserves of hydrocarbons in Saudi Arabia and carries out their production, processing and transporting.
The Kingdom plans to spend some $70 billion to implement oil and gas projects in the next five years, and the total volume of investment for the next 15-20 years is expected at $1 trillion.
President Vladimir Putin made a two-day visit to Saudi Arabia in February which was the first visit of a Russian head of state. During the Saudi-Russian business forum held in Riyadh, Putin said his country was willing to cooperate with the Kingdom in the field of nuclear energy, aerospace technology, railways, and the oil and gas sectors.
The trade volume between the Kingdom and Russia has increased in the past seven years from $88.5 million in 1999 to $412 million in 2005.
The Kingdom exports wood, coal, wood products, and paper products to Russia, while its imports from Russia include yeast, copper products, and steel. The two countries have only five joint industrial and non-industrial projects worth SR37 million.