Stroytransgaz, a construction arm of Russia's energy giant Gazprom [RTS: GAZP], and Saudi Aramco concluded the contract in Dhahran. This is a breakthrough for Russian business to a totally new market, which is the most attractive in the Middle East.
The vice president of Saudi Aramco, Ali al-Ajmi, who signed the document from the Saudi side, welcomed the arrival of "a powerful Russian organization having its own advanced technology and a big working experience both in Russia and abroad."
He also said he hopes that this first ever contract of 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."
Saudi Arabia 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.
Besides, the presence on the Saudi market will make easier for Russia the task of reaching the markets of neighboring Persian Gulf countries, who are also ready for big projects.
It is expected that the construction of the Sheyba-Abkayk oil pipeline, whose length exceeds 200 km (124 miles), will start in June and will be completed in 18 months. The construction will be conducted in the world's biggest sand desert, Rub al-Khali, known for its record high summer temperatures, quick sands and dust storms.
The project will be fully implemented by the Russian company, but workers from other countries would also be employed.
In February, Russian President Vladimir Putin made a two-day visit to Saudi Arabia, which has substantial clout in Islamic countries. It was the first visit by a Russian leader to the Arab nation, considering the two countries maintained no diplomatic relations for some 60 years.
State-owned Saudi Aramco is one of the world's largest oil and gas associations. It fully controls all reserves of hydrocarbons in Saudi Arabia, carries out their production, processing and transporting. In the rating of top 50 world oil companies, Saudi Aramco has for almost 20 years held the first place in terms of oil reserves, production, management quality and technology used.
