We present 12 CO(J=1-0) observations in the direction of the Soft Gamma Repeater SGR 1806-20 with the SEST telescope. We detected several molecular clouds, and we discuss in this paper the implications of these observations for the distance to the X-ray counterpart AX 1805.7-2025, the supernova remnant G10.0-0.3 and the very luminous O9-B2 star detected in the line of sight. The distance of SGR 1806-20 is estimated to be 14.5 ± 1.4 kpc and this Soft Gamma Repeater is very likely associated with one of the brightest HII regions in the Galaxy, W31. The large size of G10.0-0.3 (25 × 38 pc) for a young supernova remnant possibly powered by a central pulsar (AX 1805.7-2025) indicates that G10.0-0.3 could be expanding in the very low density region produced by the wind of the blue star.
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