OCTG supply contract signed with QatarEnergy | Sumitomo Corporation

Oct 17, 2024

Jun. 14, 2024 Sumitomo Corporation

Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; President and CEO: Shingo Ueno) has signed an OCTG supply contract with Qatar Energy, Qatar's state-owned energy company. The high-alloy seamless OCTG, manufactured by Nippon Steel Corporation, to be supplied under this contract will be used for CCS (*2) applications in the Blue Ammonia (*1) production plant construction project (commonly known as Ammonia 7) led by Qatar Energy in the Mesaieed region of Qatar. This is the first order for OCTG by a Japanese company for a CCS project in the Middle East.The product will use NSCarbolex® Neutral(*3), a low-CO2 steel material developed by Nippon Steel Corporation.

Qatar owns significant amount of natural gas reserves, which holds approximately 20% of the world's share of LNG exports. While supplying natural gas as a transition energy source, Qatar Energy is also involved in ammonia production and CCS projects for decarbonization. Qatar Energy's project to construct a blue ammonia production plant will produce ammonia by separating CO2 from methane gas emitted from the Mesaieed region, one of the most industrial areas in Qatar, and storing it underground. The plant will be one of the world's largest ammonia production plants, with an annual production capacity of 1.2 million tons.

CO2 injected into the ground contains various impurities that increase the corrosiveness of the OCTG. Nippon Steel's high-alloy OCTG has demonstrated excellent corrosion resistance in harsh oil and gas development environments, and in recent years has been used not only in conventional oil and gas fields but also in other areas of decarbonization and new energy such as CCS.

Sumitomo Corporation started out by exporting Japanese steel pipes overseas and has since expanded its business scope to include wholesale, supply chain management, and maintenance, thereby contributing to the “development of local communities and economies” in various countries. In recent years, Sumitomo Corporation has also been working to combat climate change by selling steel pipes for natural gas development, which is considered to emit less CO2 when burned than oil, and steel pipes for CCS and CCUS projects, which contribute to the reduction of greenhouse gas emissions.We will continue to actively engage in fields that contribute to the realization of a carbon-neutral society.

(*1) Carbon-neutral ammonia that recovers and utilizes CO2 generated in the ammonia production process(*2) Abbreviation for Carbon dioxide Capture and Storage, i.e., the capture and storage of CO2 emitted from industrial activities(*3) Steel products that use the mass balance method to allocate greenhouse gas emission reductions such as CO2 in the steel manufacturing process.(*4) Abbreviation for Carbon dioxide Capture, Utilization and Storage, i.e., the capture, storage and utilization of CO2 emitted from industrial activities