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Client prepares Ras Al-Khair steel plant contract award

31 January 2025

 

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Saudi Aramco, Saudi sovereign wealth vehicle the Public Investment Fund (PIF) and Chinese steel manufacturing conglomerate Baoshan Iron & Steel Company (Baosteel) are preparing to award an engineering, procurement, installation and construction (EPIC) contract to build an integrated steel plate manufacturing complex in Saudi Arabia.

“The commercial bids were submitted in late October. After several rounds of clarifications, the process is nearing completion with a contract award expected to be finalised shortly,” sources close to the project told MEED.

The steel plate-producing complex will be located in Ras Al-Khair Industrial City in Saudi Arabia’s Eastern Province.

MEED understands that the project is divided into eight packages. The first three are understood to include early works, site preparation and infrastructure development works. The other packages are:

  • Package 4: Direct reduced iron (DRI)
  • Package 5: Steel melt plant
  • Package 6: Plate mill plant
  • Package 7: Auxiliary plants and other infrastructure
  • Package 8: Port and materials handling

The facility is expected to have a production capacity of up to 1.5 million tonnes a year. It will mainly cater to industrial sectors such as pipelines, shipbuilding, rig manufacturing, offshore platform fabrication and tank and pressure vessel manufacturing, as well as the construction, renewables and marine sectors.

Aramco signed a memorandum of understanding with Baosteel to conduct an engineering and feasibility study for the proposed steel plate complex in September 2021.

The plant will be equipped with a natural gas-based DRI furnace and an electric arc furnace, which will reduce carbon dioxide (CO2) emissions from the steel-making process by up to 60% compared to a traditional blast furnace.

The DRI plant will be compatible with hydrogen without major equipment modifications, potentially reducing CO2 emissions by up to 90% in the future, Aramco said.

The complex will be “the first facility of its kind in the kingdom and the GCC region, advancing the regional steel industry ecosystem”, it said.

“The project aims to enhance the domestic manufacturing sector through localising the production of heavy steel plates, transferring knowledge and creating export opportunities,” Aramco added.

The steel plate complex will receive support from the Saudi government’s Shareek incentives programme for large companies. It also falls under Aramco’s local industrial investments programme, Namaat.

Saudi Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud previously listed Ras Al-Khair as one of the kingdom’s four special economic zones.

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