POSCO to supply HIC-resistant steel for Aramco’s Fadhili gas plant

POSCO, South Korea’s largest steelmaker, will supply hydrogen-induced cracking (HIC)-resistant steel to Saudi Arabian Oil Co., or Aramco, for the first time for the latter’s gas plant, a move expected to pave the way for rapid expansion of POSCO's presence in the European peers-dominated energy steel market, the company said on Sunday.

The specialty steel will be used in Saudi Arabia’s state-owned oil company’s Fadhili gas plant, located 350 kilomters northeast of Riyadh, the capital of Saudi Arabia, POSCO said.  

Under the Fadhili Gas Increment Program, Aramco is ramping up the facility’s capacity by 60%.

The two companies agreed not to disclose the supply volume or contract value, POSCO said.

HIC-resistant steel is designed to prevent hydrogen-induced cracking – a common issue in gas production and processing – and is a critical material for building gas-producing, processing and distribution facilities.

The global market for HIC-resistant steel market is forecast to grow to 21 trillion won ($15.2 billion) in 2033 from 14.5 trillion won in 2024.

The latest deal marks POSCO's entry into Aramco’s high-specification materials supply chain, which has previously sourced HIC-resistant steel exclusively from European suppliers.

After POSCO passed Aramco’s quality test for HIC-resistant steel, the Korean steel giant expects more similar orders from other energy companies.

The deal will also allow POSCO’s Korean contractors and partners to supply their products to Aramco.

When supplying specialty steel for energy facilities, it is typically offered in a package that includes pipes, pressure vessels, and fittings, which are often supplied separately by other companies.

Write to Sang Hoon Sung at uphoon@hankyung.com
Sookyung Seo edited this article.