South Korea’s Samsung Engineering has emerged as the front runner for the construction contract for Qatar Steel Company’s (Qasco) $500m expansion at its complex in Mesaieed.

Market sources have indicated that the contractor is the favourite to land the deal, which is worth considerably less than the whole budget of $500m.

“While it is not guaranteed Samsung will win, they must be feeling confident that they will win this award,” says a source familiar with the deal. “There are still a few things that need to be ironed out, but a letter of intent [LoI] should be sent to the winning contractor by the end of December.”

The source added that while the LoI will be sent by the end of the year, both Qasco and the winning bidder will be negotiated in January.

The selected contractor will work with Austria-based Siemens Steel on the design, engineering, procurement, construction and commissioning of the plant. Siemens Steel has been appointed directly by Qasco to provide the technology.

The scope of works involves the construction of a 1.1 million tonne-a-year steel shop next to its existing facilities in the industrial city of Mesaieed. Siemens Steel, which is part of the German conglomerate, will provide a 110-tonne electric arc furnace, 110-tonne ladle furnace and a six strand, high-speed billet caster (MEED 8:7:11).