Gazprom and Saudi Aramco have signed a Memorandum of Understanding for international cooperation in the gas sector.
The signing ceremony took place as part of the official visit to Russia by Salman bin Abdulaziz Al Saud, King of Saudi Arabia. The companies will explore potential cooperation along the entire value chain from natural gas exploration, production, transmission and storage to LNG projects.
The rich endowment of resources of both the Kingdom of Saudi Arabia and the Russian Federation enable companies from both countries to collaborate, said Amin H. Nasser, President and CEO of Saudi Aramco in a panel discussion at the Saudi-Russian Business Investment Forum jointly organized by the Saudi Arabian General Investment Authority (SAGIA), the Council of Saudi Chambers and the Russian Direct Investment Fund.
Nasser said vast opportunities for collaboration exist as a result of the development and diversification envisaged by Saudi Vision 2030. He outlined a number of areas for potential collaboration with Russian companies in industrial localization, international gas, downstream petrochemicals, technology, trading, climate change and carbon management.
“We have already established eight research centers around the world that complement our main research facilities in Saudi Arabia. Considering Russia’s considerable strengths in science and technology, as well as highly talented researchers, scientists and engineers, we are exploring collaboration in R&D,” he said.
Trading, according to Nasser, would also be an integral enabler to the strategic partnership with Russian entities involving opportunities in refined products swaps, trading logistics, shipping and storage facilities and new market venturing.
He also highlighted Saudi Aramco’s industrial localization program In-Kingdom Total Value Add, or iktva, as another area of opportunity for Russian services and manufacturing companies to collaborate with Saudi partners. “Considering the large oil and gas resources possessed by our two countries, we also have a common interest in strengthening oil’s position and there are numerous to collaborate in these areas,” he said.
A separate MOU between Saudi Aramco and Swiss-based LITASCO (the international marketing and trading arm of LUKOIL – one of Russia’s largest oil companies) will give Saudi Aramco access to Mediterranean refineries where Russian companies have been expanding. The proximity of the Mediterranean with the Red Sea provides an important strategic supply point to Saudi Arabia.
An MOU with Gazprom Neft (a subsidiary of Gazprom and Russia’s fourth largest oil producer) will involve technology and R&D collaboration as well as training. The cooperation will cover various areas including drilling and well workover technologies, improvements to pumping systems and the development of large-scale non-metal pipes.
An MOU with Russian Direct Investment Fund and SIBUR - Strategic marketing for petrochemicals - will enable all parties to jointly evaluate potential opportunities for cooperation in the petrochemicals sector, including marketing of petrochemicals products, both in Russia and Saudi Arabia.
Saudi Aramco is the national oil company of Saudi Arabia, 100-percent controlled by the Government. The world’s largest oil company in terms of oil production and reserves, Saudi Aramco controls fields with oil reserves totalling approximately 260.8 billion barrels (99 percent of Saudi Arabia’s reserves), accounting for about a quarter of the world’s explored oil reserves.