The soft gamma repeater SGR 1806−20 is most famous for its giant flare from 2004 , which yielded the highest \gamma -ray flux ever observed on Earth . The flare emphasized the importance of determining the distance to the SGR , thus revealing the flare ’ s energy output , with implications on SGRs energy budget and giant flare rates . We analyze x-ray scattering echoes observed by { \it Swift } /XRT following the 2006 August 6 intermediate burst of SGR 1806−20 . Assuming positions and opacities of the molecular clouds along the line-of-sight from previous works , we derive direct constrains on the distance to SGR 1806−20 , setting a lower limit of 9.4 kpc and an upper limit of 18.6 kpc ( 90 % confidence ) , compared with a 6−15 kpc distance range by previous works . This distance range matches an energy output of \approx 10 ^ { 46 } erg s ^ { -1 } for the 2004 giant flare . We further use , for the first time , the x-ray echoes in order to study the dust properties in molecular clouds . Analyzing the temporal evolution of the observed flux using a dust scattering model , which assumes a power-law size distribution of the dust grains , we find a power-law index of -3.3 _ { -0.7 } ^ { +0.6 } ( 1 \sigma ) and a lower limit of 0.1 \mu \mbox { m } ( 2 \sigma ) on the dust maximal grain size , both conforming to measured dust properties in the diffused interstellar medium ( ISM ) . We advocate future burst follow-up observations with { \it Swift } , Chandra and the planned NuSTAR telescopes , as means of obtaining much superior results from such an analysis .