POSCO breaks Europe's monopoly in HIC-resistant steel supply to Aramco

Saudi Aramco's Fadhili gas plant in Dammam, Saudi Arabia / Courtesy of POSCO

POSCO will provide Saudi Aramco with steel resistant to hydrogen-induced cracking (HIC) to assist the world’s largest oil producer in increasing the Fadhili Gas Plant’s processing capacity by 60 percent.

This is the first time a non-European steelmaker will supply Aramco with the specialty material needed for plant construction.

HIC-resistant steel is primarily used in pressure vessels and pipes handling oil and gas under harsh conditions.

Requirements for the HIC-resistant steel used at Aramco’s plants exceed international standards, so European mills had been exclusive suppliers until POSCO’s recent deal. Worldwide, only nine steelmakers currently meet Aramco’s strict standards.

POSCO noted that the latest supply deal will strengthen its foothold in the high-value-added material market.

The steelmaker added that its collaboration with Aramco enabled the Saudi oil giant to select Korean firms for the production of pressure vessels and pipes for the project, which expands the capacity of the existing Fadhili Gas Plant located 350 kilometers northeast of Riyadh, Saudi Arabia’s capital.

Using POSCO’s HIC-resistant steel, Hyundai Steelpipe and SeAH Steel are manufacturing pipes for Aramco, while Bumhan Mecatec and TK are producing pressure vessels and fittings, respectively.

“Despite the continuing uncertainties in the global trade environment, we have secured unmatched competitiveness by broadening our sales channels through high value-added products,” a POSCO official said. “We have also driven growth in the domestic manufacturing industry through close partnerships with a range of customers.”