Al-Rajhi recieves bids from contractors for $3bn steel complex

01 April 2012

Technical submissions for Saudi Arabian steel project now in, with commercial bids due for June

The local Al-Rajhi Steel has received the technical bids for the engineering, procurement and construction (EPC) packages at its planned $3bn steel complex at King Abdullah Economic City near Jeddah in Saudi Arabia.

Months of meetings between the client, technology providers and EPC contractors have taken place and the large technical bid documents have been submitted.

“This is a huge project and all of the technology providers have to prove that they can build a complex that is perfectly integrated with all the separate units,” says a steel industry source based in the Middle East. “This means that the documents submitted to Al-Rajhi were extremely large and extremely technical.”

The source adds that he expects several clarification meetings with all the bidders will be held over the coming months before any winners are announced.

The partnerships agreed by the technology providers and EPC contractors include:

  • Danieli (Italy)/Daelim Industrial (South Korea)
  • Siemens Steel (Austria)/Samsung Engineering (South Korea)
  • SMS Meer (Germany)/Samsung Engineering (South Korea)
  • SMS Siemag (Germany)/Hyundai Engineering & Construction (South Korea)
  • SMS Siemag (Germany)/Petrofac (UK)    

The commercial bids for the scheme will not be submitted until June due to the number of clarification meetings planned to get the technical specifications right.

Al-Rajhi Steel plans to make the awards for the scheme in the third quarter of 2012 with completion planned for 2015.

The scope of works for the Al-Rajhi complex includes a direct-reduced iron (DRI) plant producing 1.8 million tonnes a year (t/y) of steel, two steel shops produced billets, blooms and slabs, a mill producing long products and a mill producing flat products, as well as a cold-rolling process plant.

The project is being fast-tracked during 2012 because of a time limit placed on gas allocation from oil company Saudi Aramco. The financing of the project is still ongoing.

The complex will be the largest steel facility ever built in the region in one phase.

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