Aramco, Baosteel venture into hydrogen-compatible green steelmaking

Steel Insights Bureau

Fossil fuel energy major Aramco has joined hands with Baoshan Iron & Steel Co. Ltd (Baosteel) of China and Public Investment Fund (PIF) of Saudi Arabia to establish the first integrated gasbased steel plate manufacturing complex in Saudi Arabia, which, in near future, will be fueled by hydrogen.

“The facility is expected to have a steel plate production capacity of up to 1.5 million tons (mt) 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 percent 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 9 percent in the future,” a joint release by the partners said.

Saudi Arabia would be the project’s primary target market, with plans to export to the Gulf Cooperation Council (GCC) and broader MENA region. It is expected to create new 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.

“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,” the release added.

The complex would bring together Aramco’s 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.