STATEMENT: Aramco, Baosteel and PIF sign an agreement (1)

Aramco, Baosteel and PIF sign agreement to establish Saudi Arabia's first integrated sheet steel fabrication complex

DHAHRAN, Saudi Arabia, May 2, 2023 /PRNewswire/ -- Aramco, one of the world's leading integrated energy and chemical companies, Baoshan Iron

Subject to customary regulatory approvals and lockout conditions, the joint venture complex is expected to be located in the Ras al-Khair Industrial City, one of 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 for Economic and Development Affairs.

The complex will bring together Aramco's unrivaled ecosystem of energy and industrial services, Baosteel's advanced sheet steel industry capabilities, and FPI's strong financial strength and investment experience. It would be the first facility of its kind in the Kingdom and in the GCC region, boosting the regional steel industry ecosystem. The project aims to improve the domestic manufacturing sector by localizing heavy sheet steel production, 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-fired direct reduced iron (DRI) furnace and an electric arc furnace, which aims to reduce CO2 emissions from the steelmaking process by up to 60% compared to a blast furnace. traditional. DRI's plant would be hydrogen compatible without major equipment modifications, which could reduce CO2 emissions by up to 90% in the future.

Amin H. Nasser, President and CEO of Aramco, said: "The Kingdom's first sheet steel production facility is expected to enhance the Saudi steel industry ecosystem and improve the localization of the supply chain. In the Under Aramco's flagship industrial investment program Namaat and supported by the government's Shareek programme, this joint venture is expected to create jobs and contribute to economic growth and diversification.This joint venture is also an example of bringing together insights from other sectors. With the support of Baosteel and the PIF in building capacity in the Kingdom's industrial sector, Aramco aspires to create additional value for our company and our partners."

Yazeed A. Al-Humied, FPI's Deputy Governor and Chief Investment Officer, Middle East and North Africa, commented: "FPI is diversifying the Saudi economy by unlocking opportunities and enabling key strategic sectors in the local market. This partnership is intended to establish an integrated steel plate fabrication plant that will strengthen Saudi Arabia's industrial development and enable it to play a supplier role in the metal industry It will also build on PIF's mandate to establish new strategic partnerships locally and globally; locate technologies and knowledge; empowering the private sector; and creating more direct and indirect employment opportunities in the local market. Since 2017, FPI has invested in 13 strategic sectors and created 77 new companies nationwide."

Zou Jixin, Chairman of Baosteel, noted, "This project is an active practice by Baosteel to explore lower-carbon pathways for the steel industry, an important achievement in promoting Baosteel's international development strategy. The project aims to contribute positively to the localization of the steel industry chain, job creation and local economic prosperity in Saudi Arabia".

Chen Derong, General Manager of Baowu Group (Baosteel's parent company), and Hu Wangming, General Manager of Baowu Group, have fully supported the project.

Saudi Arabia would be the main target market for the project, with plans to export to the GCC and the MENA region in general. It is expected to create new jobs and significantly reduce reliance on imported steel, serving customers in several strategic industry sectors, including pipelines, shipbuilding, platform manufacturing, offshore platform manufacturing, and pressure vessel and tank manufacturing. It will also serve the construction, renewable energy and marine sectors.

The investment is in line with FPI's strategy of unlocking the capacities of promising sectors and industries of strategic importance that can boost the diversification of the local economy. It will support several FIP priority sectors that require sheet steel and create a more resilient steel industry in the region.

The sheet steel complex is supported by the Kingdom's Shareek program for large companies, which aims to foster greater cooperation between the public and private sectors, create jobs and enhance the development of the Saudi economy by providing incentives for domestic investment. It is also part of Aramco's Namaat program, which aims to establish strategic partnerships that drive diversification and expansion of Saudi Arabia's economy, supply chain and industrial investment.

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Signing ceremony between Aramco, Baosteel and PIF of the sheet steel manufacturing joint venture in Dhahran, Saudi Arabia on May 1

About Aramco

Aramco is a global integrated energy and chemicals company. We are moved by the conviction that energy is an opportunity. From producing approximately one in eight barrels of the world's oil supply to developing new energy technologies, our global team is dedicated to creating impact in everything we do. We focus on making our resources more reliable, more sustainable, and more useful. This helps promote long-term stability and growth around the world. www.aramco.com.

About PIF

The Public Investment Fund (FPI) is one of the largest and most influential sovereign wealth funds in the world. Since 2015, when the Board of Directors was reconstituted and supervision transferred to the Council for Economic and Development Affairs, the Fund's Board of Directors has been chaired by His Royal Highness Crown Prince Mohammad bin Salman bin Abdulaziz, Prime Minister, Chairman of the Council for Economic and Development Affairs and President of the Public Investment Fund. PIF has a leading role in advancing Saudi Arabia's economic transformation and diversification, as well as contributing to shaping the future of the global economy. Since 2017, PIF has established 77 companies and has directly and indirectly created more than 500,000 jobs by the end of 2021.

PIF is building a diversified portfolio by entering attractive and long-term investment opportunities in 13 strategic sectors in Saudi Arabia and around the world. The PIF strategy, as set out in the PIF Program 2021-2025 - one of the Vision 2030 realization programs - aims to enable many promising sectors and contribute to increasing local content by creating partnerships with the private sector. , in addition to injecting at least 150,000 million riyals annually into the local economy. PIF works to transfer technologies and localize knowledge to build a prosperous and sustainable economy at the national level. As the investment arm of Saudi Arabia, PIF seeks to make unique investments, and is creating strategic alliances and partnerships with prestigious international institutions and organizations, that contribute to achieving real long-term value for Saudi Arabia, in line with the Vision 2030 goals. PIF has also created an operational governance model that reflects its main tasks and objectives, in line with international best practice. The application of this governance model improves the level of transparency and efficiency in decision-making and future progress.

More information about PIF available via: http://www.pif.gov.sa

About Baosteel

Baosteel is a world-leading, modernized and integrated steel company. The company possesses first-class manufacturing capacity and services, and ranks second in crude steel production, first in automobile sheet production and first in silicon steel production among all listed steel companies. It is also one of the world's steel companies with the most complete carbon steel products.

Baosteel places great emphasis on cultivating its ability to innovate, actively develops and deploys advanced technologies for manufacturing, energy conservation and environmental protection, and has established a marketing, processing and service network with nationwide coverage and global involvement. . All of its independently developed high-end products reach the world advanced level. With the strategic goal of becoming the most competitive steel company in the world and a listed company with the highest investment value, Baosteel is dedicated to providing outstanding products and services to customers, creating the best value for shareholders and society and achieving a joint development with the interested parties.

www.baosteel.com

Disclaimer

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