Senaat-Japanese JV to build $300m pipe factory
Al Gharbia Pipe Company in Abu Dhabi will build large diameter, high-grade steel pipes for use in the GCC's construction and offshore oil & gas markets
Senaat, the industrial holding company owned by the Abu Dhabi government, has agreed a joint venture deal with two Japanese steel firms to build a $300m pipe factory in Abu Dhabi's Khalifa Industrial Zone (Kizad).
The company has signed the deal with Japan's JFE Steel Corporation and Marubeni-Itochu Steel.
They will create a new business known as Al Gharbia Steel Pipe Company which will specialise in manufacturing high quality, sour grade steel pipes for use in both the construction and oil & gas industries.
Once complete in 2018, the plant will employ 370 staff, produce up to 240,000 tons of steel pipe a year for markets in the GCC and wider MENA region.
Sour grade pipes are designed to prevent corrosion associated with hydrogen sulphide - a characteristic of offshore operations.
Eng. Suhail Mubarak Bin Athaeeth Al Ameri, CEO of Senaat, said: “In striving to uphold our mandate of championing UAE industry and contributing to the nation’s diversification efforts, Senaat will continue to expand its portfolio through global partnerships with leaders in their respective fields.
"The project not only meets a stringent demand at a time where being efficient in the oil and gas and other industries is more important than ever; but it is also symbolic of the strength and the calibre of the relationships that we are able to forge."
Senaat was established by the Abu Dhabi government as a way of diversifying the emirate's economy, owns a number of construction-related businesses including oil & gas contractor NPCC, Emirates Steel, Arkan Building Materials and Dubai-based cable manufacturer Ducab (in a joint venture with Dubai's government). It also co-owns the Taweelah Aluminium Extrusion Company.
It will hold a 51% stake in Al Gharbia Pipe Company, with the Japanese partners holding the remanining 49%.
Takafumi Nishiuma, vice president of JFE Steel, said: “The GCC region is highly competitive in terms of drilling costs and oil and gas reserves capacity.
With the development and production of oil and gas forecast to remain robust across the region despite recent volatility, the demand for high-quality steel pipes for pipelines to transport these resources is expected to expand steadily; we see huge opportunities for investment in this market and particular in the UAE.”