Saudi oil giant Aramco and sovereign wealth fund PIF (Public Investment Fund) have joined forces with Baosteel, a 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.

The joint venture complex is expected to come up in Ras Al-Khair Industrial City, one of the four new special economic zones recently announced by HRH Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince, Prime Minister and Chairman of the Council of Economic and Development Affairs.

It would be the first facility of its kind in the kingdom and the GCC region and aims to enhance the domestic manufacturing sector through localising the production of heavy steel plate 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 per cent 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 per cent in the future.

Aramco President and 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 localisation. 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.”