Saudi Arabia is expected to sign several memoranda of understanding (MoUs) with Russian companies during a state visit to Moscow next week, industry sources said on Wednesday.
State oil giant Saudi Aramco and Saudi Basic Industries Corp (SABIC) 2010.SE will sign an MoU with Russia’s biggest petrochemical company Sibur to look for opportunities to build petrochemical plants in both countries, one of the sources said.
The agreement is one of several due to be signed during King Salman’s visit to Russia next week, his first trip to Moscow since becoming king in 2015.
Saudi Arabia and Russia, the world’s two biggest oil producers, have worked closely together over the past year to bring about a deal between OPEC and non-OPEC crude producers to curb global output and support prices.
Other agreements expected to be signed include an MoU between Saudi Aramco and Novatek , Russia’s biggest non-state gas producer, to look for investment opportunities in the gas sector.
Sibur declined to comment. Novatek’s spokesman declined immediate comment. SABIC said it did not comment on rumour or speculation while Aramco did not immediately provide a comment.
Kirill Dmitriev, the head of the sovereign Russian Direct Investment Fund (RDIF), said on Tuesday that the fund was in the final stage of negotiations with Saudi partners about major Russian projects in the kingdom, without giving specifics.
He said, however, that the fund and its Saudi partners would announce the creation of a new investment platform in energy sectors, as well as investments in industry and infrastructure.
One of the sources said there was interest in Saudi Arabia’s renewable energy sector, where the kingdom was looking for up to $50 billion in investment to help it produce 10 percent of its power from renewable sources.
Saudi Arabia is also looking at nuclear energy to meet rising domestic power demand so more of its crude oil could be exported or converted into petrochemicals, rather than being used to generate electricity.
Saudi Arabia signed a preliminary nuclear cooperation agreement with Russia in 2015 and the kingdom recently announced plans to build its first nuclear reactors, with a combined capacity of 2.8 gigawatts.
Significant results have been achieved in the area of investment cooperation under a joint $10 billion framework created by the RDIF and Saudi Arabia’s Public Investment Fund (PIF), Dmitriev said.
Dmitriev told Reuters in June after the RDIF agreed to buy a stake in Russian oil services company Eurasia Drilling that the fund would also welcome Saudi investment in the company.
He said Saudi investors were already involved in a number of highly profitable projects in Russia, in sectors such as petrochemicals, infrastructure, logistics and hydropower, among others.