Saudi Arabia has signed three memoranda of understanding with Kuwait, Qatar and Egypt to expand cooperation in the energy sector. In parallel, the Central Bank of Syria issued its first letter of credit in 14 years for a deal with “Saudi Aramco“ -ndash; a move that facilitates the import of petroleum products and the return of the country to international banking channels.
Saudi Arabia's Energy Minister Abdulaziz bin Salman Al Saud signed the agreements with representatives of the three countries. The agreements with Kuwait and Egypt complement a framework announced by the Saudi state news agency SPA for closer cooperation in electricity, renewable energy, oil and natural gas.
Pipelines and energy supplies
The agreement with Qatar covers oil, natural gas and petrochemicals. The two countries will also explore the possibility of building pipelines for the transport and export of oil and gas. The agreements also include refining, electricity, clean hydrogen, renewable sources and energy storage.
Saudi Arabia has agreed with Kuwait to cooperate in electricity, renewable energy, electricity networks and electricity exports. Joint initiatives in energy efficiency, energy storage and smart grids are also planned.
In early August, Kuwaiti Oil Minister Tariq al-Rumi said his country was in talks with Saudi Arabia and other Arab countries about a new crude oil export pipeline. The aim is for some of the supplies to bypass the strategic Strait of Hormuz.
The memorandum with Egypt focuses on oil, natural gas and their derivatives, including trade, transportation, storage and distribution of energy products. The agreements also provide for the development of related infrastructure and logistics.
Syria opens banking channel for oil transactions
The Central Bank of Syria announced that it had issued a letter of credit for the supply of petroleum products between the Syrian Petroleum Company and “Saudi Aramco“. A letter of credit is a banking instrument that guarantees payment for an international trade transaction upon fulfillment of predetermined conditions.
The operation was organized in cooperation with a major American bank, but its name was not specified. According to the Central Bank of Syria, the mechanism allows payments for the transaction to be made through the official banking system and facilitates the financing of oil product imports.
The Syrian step is part of Damascus' efforts to restore its access to international financial channels after the lifting of US sanctions and the removal of the country from the US list of states supporting terrorism. For the banking sector, this is the first such operation in 14 years, and for the energy market - an opportunity to settle import supplies through official financial instruments.
Sources: bta.bg, saudigazette.com.sa