Saudi oil giant Aramco and sovereign wealth fund PIF (Public Investment Fund) have joined forces with Baosteel, the world’s leading steel conglomerate, to establish an integrated steel plate manufacturing complex within the kingdom with a production capacity of up to 1.5 million tonnes per year.
Subject to customary regulatory approvals and closing conditions, the joint venture complex will comd up in Ras Al-Khair Industrial City, one of the four new special economic zones recently announced by His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince, Prime Minister and Chairman of the Council of Economic and Development Affairs.
The complex would bring together Aramco’s unrivaled energy and industrial services ecosystem, Baosteel’s advanced steel plate industry capability and PIF’s strong financial capabilities and investment expertise.
It would be the first facility of its kind in the Kingdom and the GCC region, advancing the regional steel industry ecosystem. The project aims to enhance the domestic manufacturing sector through localizing the production of heavy steel plates, transferring knowledge and creating export opportunities.
The plant will 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.
Aramco President & CEO Amin H. Nasser said: "The kingdom’s first steel plate production facility is expected to enhance Saudi Arabia’s steel industry ecosystem and improve supply chain localization. Under our flagship industrial investment programme, Namaat, and supported by the government’s Shareek programme, this joint venture is expected to create jobs and contribute to economic growth and diversification."
"This joint venture is also an example of bringing together expertise from other sectors. With Baosteel and PIF supporting in capacity building in the Kingdom’s industrial sector, Aramco aims to create additional value for our company and our partnersm," he noted.
PIF Deputy Governor and Head of Mena Investments Yazeed A. Al-Humied said: "PIF is diversifying the Saudi economy by unlocking opportunities and enabling key strategic sectors in the local market. This partnership aims at establishing an integrated steel plate manufacturing facility that will strengthen Saudi Arabia’s industrial development and enable its role as a supplier within the metal industry."
The investment aligns with PIF’s strategy to unlock the capabilities of promising sectors and strategically important industries that can drive the diversification of the local economy.
It will support a number of the sovereign fund's priority sectors that require steel plate and create a more resilient steel industry in the region.
"It will also build on PIF’s mandate to establish new strategic partnerships locally and globally; localize technologies and knowledge; enable the private sector; and create more direct and indirect job opportunities in the local market. Since 2017, PIF has invested in 13 strategic sectors and established 77 new companies domestically," he stated.
Baosteel Chairman Zou Jixin said: "This project is an active practice by our group to explore lower-carbon paths for the steel industry, a major achievement in promoting the international development strategy of Baosteel."
"The project aims to contribute positively to the localization of the steel industry chain, job creation and local economic prosperity in Saudi Arabia," he noted.
According to him, the new project is expected to create jobs and significantly reduce reliance on imported steel, serving customers in several strategic industrial sectors including pipelines, shipbuilding, rig manufacturing, offshore platform fabrication and tank and pressure vessel manufacturing.
It also would aim to serve the construction, renewables and marine sectors, he added.-TradeArabia News Service
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