Loan for Large-diameter Welded Steel Pipe Manufacturing and Sales Business of Japanese Companies in Abu Dhabi, United Arab Emirates
Supporting Overseas Business Deployment of Japanese Companies
- Region: The Middle East
- Manufacturing and Services
- Overseas Investment Loans
The Japan Bank for International Cooperation (JBIC; Governor, CEO: Hiroshi Watanabe) signed on February 22nd a loan agreement totaling up to USD111 million (JBIC portion) with Al Gharbia Pipe Company LLC (AGPC), an Abu Dhabi, United Arab Emirates (UAE) company. The loan is cofinanced with Sumitomo Mitsui Banking Corporation, Mizuho Bank, Ltd. and National Bank of Abu Dhabi PJSC, bringing the overall cofinancing amount USD185 million.
The loan is intended to finance the manufacturing and sales of large-diameter welded steel pipes for oil/gas pipelines by AGPC, a joint venture company owned by JFE Steel Corporation (JFE), Marubeni-Itochu Steel Inc. (MISI) and a UAE company, General Holding Corporation PJSC/SENAAT*1
(SENAAT), with a production capacity of up to 240 thousand tons per year.
The Middle East region, including the UAE, is the world’s largest producing area for oil and gas, in which a stable demand for high grade pipes for delivery of oil and gas is expected. JFE and MISC aim to enhance their ability to respond to customer needs in the Middle East region, as well as to maintain cost competitiveness, by producing high-quality steel pipes for pipelines locally through the joint venture. Thereby, the loan will contribute to maintaining and strengthening the international competitiveness of the Japanese steel industry through supporting the overseas business deployment of JFE and MISI.
The UAE is vital to Japan's resource strategy as it has been a stable source of crude oil for more than 30 years, and because Abu Dhabi allows foreign oil companies to operate on the basis of concession agreements. For Abu Dhabi, this project is the first project for local production of high grade steel pipes, and through this joint venture, SENAAT aims to enhance the UAE’s position as a leading steel producer. With advanced Japanese steel pipe production technology it can contribute to the diversification of the non-energy sector of the Abu Dhabi economy. This loan will also contribute to enhancing the multi-layer relationship between the two countries.
- *1 SENNAT, wholly owned by the Abu Dhabi government, is the largest conglomerate in the manufacturing sector of the UAE.