Aramco, Baosteel and PIF sign agreement
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 is expected to be located 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 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.
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