SEOUL, July 15 (AJP) - South Korea’s largest steelmaker POSCO will supply hydrogen-induced cracking (HIC) resistant steel to Saudi Aramco for its Fadhili gas plant expansion project.
The agreement is a strategic win for POSCO and a notable shift in procurement norms for Aramco, the world’s largest oil producer, which has traditionally sourced such critical materials from European manufacturers.
The Fadhili expansion, designed to increase the plant’s gas processing capacity by roughly 60 percent, demands materials capable of withstanding severe operational conditions, including hydrogen-induced cracking — a corrosive failure mechanism caused by hydrogen sulfide exposure in high-pressure environments.
HIC-resistant steel, a specialized alloy used in the fabrication of pipes, pressure vessels, and structural components, plays a vital role in energy infrastructure.
While POSCO has previously supplied HIC-grade steel for pipelines, this project represents the first time its steel will be deployed within the plant itself, positioning the Korean company as a serious contender in an elite global market.
“This contract is a clear example of how technological innovation and quality can break entrenched market barriers,” a POSCO spokesperson said.
The company described the deal as part of its broader strategy to achieve what it calls “super-gap” competitiveness — offering premium, high-value-added steel products that few global players can match.
Beyond the commercial win, the agreement carries significant implications for South Korea’s broader industrial ecosystem. The HIC-resistant steel will be fabricated domestically into pipes, pressure vessels, and other components by firms including Hyundai Steel Pipe, SeAH Steel, Bumhan Mecatec, and Taekwang Industrial.
Aramco had initially considered European firms for downstream production. But POSCO’s selection helped redirect that work to South Korean manufacturers, bolstering the country’s plant engineering and fabrication sectors.
For Aramco, the decision also reflects a broader shift toward diversifying its supplier base as it embarks on ambitious expansions across gas and petrochemical processing.
Construction on the Fadhili gas plant expansion is expected to begin later this year.
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