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The company has failed in its attempt to extract cheaper gas supplies from the Pakistani government. It warned in mid-January that it would move its operations out of the country unless cheap gas were provided.
The Saudi Arabian government has offered to provide gas at $0.70 per mmBtu to Tuwairqi Steel if it sets up a plant there, according to the source.
The Pakistani government supplies gas at PRs488 ($4.79) per mmBtu.
Al Tuwairqi Pakistan is a joint venture between Saudi Arabia’s Al-Tuwairqi Group and South Korea’s Posco, and has production capacity for 1.28 million tpy of direct reduction iron (DRI).
The mill was inaugurated in January 2013 but has been shut down in recent months due to high production costs.
Details of how long the dismantling process will take, and where in Saudi Arabia the plant will be relocated, have not yet been disclosed.