Aramco, Baosteel, and PIF Ink Agreement for Steel Plate Manufacturing Complex in Saudi Arabia

Posted on 05/02/2023

Saudi ​Aramco, Baoshan Iron & Steel Co., Ltd. (Baosteel), and the Public Investment Fund (PIF) have signed a shareholders’ agreement to establish an integrated steel plate manufacturing complex in the Kingdom of Saudi Arabia. Subject to customary regulatory approvals and closing conditions, the joint venture complex will be located in Ras al-Khair Industrial City, one of the four new Special Economic Zones recently announced by Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince, Prime Minister and Chairman of the Council of Economic and Development Affairs. This would be Saudi Arabia’s first steel plate production facility.

The project aims to enhance Saudi manufacturing sector through localizing the production of heavy steel plates, transferring knowledge and creating export opportunities. The facility is expected to have a steel plate production capacity of up to 1.5 million tons per year. It would also be equipped with a natural gas-based direct reduced iron (DRI) furnace and an electric arc furnace, which aims to reduce CO2 emissions from the steel-making process by up to 60% compared to a traditional blast furnace. The DRI plant would be compatible with hydrogen without the need for major equipment modifications, potentially reducing CO2 emissions by up to 90% in the future.

On February 2, 2023, Saudi Arabia – King Salman Energy Park (SPARK) disclosed the groundbreaking of SeAH Gulf Special Steel Industries’ (SeAH GSI) new production facility. SeAH GSI, a joint venture between the Saudi Arabian Industrial Investments Company (Dussur) and South Korean steel manufacturer – SeAH CSS, is building the first of its kind stainless-steel seamless pipes and tubes production facility in Saudi Arabia. The new facility, which is valued at almost SAR 900 million (circa US$ 240 million), will span almost 178,000 square meters and will have the operating capacity to produce 20,000 tons of seamless pipes & tubes per annum.

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