In a statement Tuesday, the companies said the integrated, joint venture facility will be based on the direct reduced iron (DRI)–electric arc furnace route. The DRI plant will consume natural gas, but will capable of using hydrogen as a reductant. 

"The Kingdom's first steel plate production facility is expected to enhance Saudi Arabia's steel industry ecosystem and improve supply chain localization. Under Aramco's flagship industrial investment program, Namaat, and supported by the government's Shareek program, this joint venture is expected to create jobs and contribute to economic growth and diversification,” said Saudi Aramco president and chief executive Amin H. Nasser. 

The joint venture complex is 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. 

The mill will produce for both the domestic market and for export to the Gulf Coast countries as well as the Middle East/North Africa region. Its output will be geared for 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.

"This project is an active practice by Baosteel 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,” said Baosteel chairman Zou Jixin.