amtpj project info memo_deh_9 mar 2013

00

February 2013

AMTPJ Project Overview

Contents

Projects Overview Strategic Partner Overview Key Competitive Advantages AMTPJ Market Project Financials The Opportunity Photos from Site

Projects Overview

ArcelorMittal , the worlds largest steel manufacturers, joint forces with a Saudi Partner (Tanmiah) to develop a state-of-art Industrial Facility (AMTPJ) to produce a 600,000 Ton/year steel mill producing steel tubes and pipes at JubailIndustrial City , Saudi Arabia. Project total investment is in the range of 1 Billion $ US .

Two-thirds of the mills capacity will be used to manufacture oil-country tubular goods (OCTG), for which Saudi Aramco will be the main customer. OCTGs comprise pipe and tube products used in the petroleum industry, such as drill pipes, pipe casings and oil pipes. The remaining capacity will be used to manufacture line pipes in sizes ranging from 4-14 inches. The mill will be fed with billets and slabs produced by ArcelorMittal steel plants located around the world.

Projects Overview

Project Description : Location: Industrial Area of Jubail 2 , KSA Plot Area: 48 ha (38 ha are used in the current project, with

possible 10 ha for future extensions) Facilities Port (at 20 km) Input: Round Billets (~690 kt/y) Output: Seamless Tubes (614 kt/y in 2016). Grades: OCTG and Line Pipe Diameter Range 4 (114.3mm) to 16 (406.4mm) Wall Thickness 5.26mm to35.7mm Heat Treatment Capacity 350,000t/year OCTG Finishing Capacity 370,000t/year

Applications:

OCTG Casing for gas & oil, used as the outer protection in a well. (4/20) OCTG Tubing for gas & oil, used as the inner in the well. (2/4) Line Pipe, used for transmission of oil & gas in petrochemical plants (2/15)

Metallurgy Groups: OCTG: Group 1 J55, K55, N80 (Normalizing) Group 2 L80, C90, T95 (Quenched & Tempered) Group 3 P110 (Quenched & Tempered) Group 4 Q125 (Quenched & Tempered)

Pipes: following the norms : B, X42, X 46, X52, X60, X65, X70

Projects Overview

Location

Projects Overview

Site Overview

Projects Overview

Process Flow

Projects Overview

We choose the best technology from the World Leaders . AMTPJ shall be World Class plant with state of art technology, designed to meet stringent quality

parameters of customers like Saudi Aramco.

and this is just a beginning .

Selection of Best Technology

Projects Overview

Projects Overview

Activity Progress as of 01 Dec 12 Comments

Engineering (CISDI) 99.95% Excluding Coupling Shop and Security Gate

Main Steel Structure 99.9% Last side sheeting and staircases work in progress

Civil works 97.5% Roads, false ceiling,slab on grade ,Doors &windows painting work in progress .

Mechanical & Electrical Equipment Erection 76.5%

Contractor agreement implemented Detailed schedule finalized Hydraulic piping and Electrical & Control erection on the critical path.

As of today, the Hot Mill Construction, the Pre-Finishing and the Finishing Schedules have been finalized.

Milestone SCHEDULE Target

Hot Mill 28-Mar-13

Pre-finishing & Finishing Line 28-Apr-13

First Pipe on Cooling Bed 04-Sep-13

First Commercial Pipe 04-Dec-13

Projects Schedule

Projects Status

Strategic Partner Overview

Strategic Partner Overview

AMTPJ is an LLC company registered in Saudi Arabia,investing in a Seamless Steel Pipes manufacturing plant inSaudi Arabia to manufacture and sell high value addedseamless OCTG products and Line Pipes.

The project has been designed to meet the OCTG and LinePipes demand in Saudi Arabia, GCC and selected countries inAfrica.

The seamless mill will have a capacity of 600 Kilo-tons peryear; Two thirds of its capacity will be used for OCTG, andthe remainder for Line Pipes, in sizes ranging from 4 to 16inches.

The Project is being constructed in the Eastern region ofSaudi, in Jubail 2 Industrial City (25 KM from the port). Thecost of the project has been estimated at SAR 3.37 billionand the mill is expected to commence commercialoperations in Dec 2013.

The plant can produce 225 different types of productsthereby providing the company with immense Product andOperational flexibility.

Competitive advantage is also reinforced by proximity tocustomers and by local partnerships.

The main raw materials for the production are two types ofspecial round billet, carbon steel and an alloy steel. AMTPJhas signed a long term raw material supply agreement withArcelorMittal Ostrava.

ArcelorMittal is the largest steel producer in theworld. The group is head quartered in Luxembourg,and operates in more than 60 countries in Europe,Asia Africa, North and South America.

ArcelorMittal is listed on the stock exchanges ofNew York, Amsterdam, Paris, Brussels, Luxembourgand on the Spanish stock exchanges of Barcelona,Bilbao, Madrid and Valencia.

ArcelorMittals revenues in 2010 amounted to US$78 billion. It was one of the top 50 companiesglobally.

The Group manufactures and sells:

Flat sheets Stainless steel and alloys Long sheets Wire products Pipes and tubes

o Seamless pipes and tubeso Welded pipes and tubes

ArcelorMittal Group AMTPJ Overview

1The worlds leading steel and m ining com pany Arcelo rMi ttal is the world's number one steel and min ing company, with over

260,000 employees in more than 60 countries. Arce lorMittal is the leader in a ll ma jor global steel markets, including automotive, construction, household appliances and packaging, with lead ing R&D and technology, as we ll as sizeable captive suppl ies of raw materials and outstand ing distribu tion networks.

An industria l presence in 20 countries exposes the company to all ma jor markets, from emerging to mature.

Arcelo rMi ttal values scale , vertical integration and product diversi ty. Approximately 38% of our steel is produced in the Americas, 46% in Europe and 16% in other coun tr ies such as Kazakhstan, South Africa and Ukraine.

Underpinn ing all our operations is a philosophy to p roduce safe, sustainab le steel

The worlds leading steel and m ining com pany Arcelo rMi ttal is the world's number one steel and min ing company, with over

260,000 employees in more than 60 countries. Arce lorMittal is the leader in a ll ma jor global steel markets, including automotive, construction, household appliances and packaging, with lead ing R&D and technology, as we ll as sizeable captive suppl ies of raw materials and outstand ing distribu tion networks.

An industria l presence in 20 countries exposes the company to all ma jor markets, from emerging to mature.

Arcelo rMi ttal values scale , vertical integration and product diversi ty. Approximately 38% of our steel is produced in the Americas, 46% in Europe and 16% in other coun tr ies such as Kazakhstan, South Africa and Ukraine.

H ealth and Safety: our no.1 priority

Lost tim e in ju r y fr equenc y ra t e (LT IFR ) im pr oved to 1.1 in the f i rs t qu arte r 2012 Our Jour ney to Z ero p r ogram m e aim s a t ac h iev ing z ero fata li ties , ac ciden ts and occ u pationa l i llnes s es 2012 Hea lth a nd S afe ty Da y a r ound the them e S top , th ink and ac t s a fely C ourage ous lead ers h ip s e t of va lues : ev ery one has t he au thor it y, r esp ons ib i l ity and a cc ountab il i ty to

cour ageous ly spe ak up when s om e one is tho ught to be a t ri sk

2

ArcelorM ittal s Health and Safety p er form an ce imp roved again in 2011

A n n u al h ea l th a n d s a fety fre q u en c y ra te* (min in g a n d s te el )

3 . 12. 5

1. 9 1 .81. 4

1 .0

0 .0

0 .4

0 .8

1 .2

1 .6

2 .0

2 .4

2 .8

3 .2

20 0 7 20 0 8 2 00 9 2 01 0 2 0 11 20 1 3

Q u ar ter ly h ea l th a n d sa fet y fre q u en c y ra te * (min in g a n d s tee l

1 . 4 1 . 5 1 .51 .2

1 .6

0 .0

0 .4

0 .8

1 .2

1 .6

4 Q 1 0 1Q 1 1 2 Q 1 1 3 Q 1 1 4Q 1 1

* IIS I- sta nda rd: Fr = Los t T ime Injur ies per 1.0 00 .00 0 w or ked h our s; b ased on ow n pe rso nne l an d c ontr act ors

143

ArcelorMittal 2011 key figures

Leader in the metals and mining sector with 63 blast furnaces and 49 electr ic arc furnaces* S ucce ssfu l spin off of stain less s teel busin ess ( A pe ram ) f ollow in g sh ar eho der s ap pr ova l on Jan uar y 25 , 2 011 . A ccor din gly st ainle ss ste el r esul t s ha ve b ee n sh own as d is cont inue d o per at ions and all p erio ds r ep ort ed (re sults and op er ation al K P Is) ha ve b een r ecast .

* * Own ir on or e an d c oal p ro duc tion exclu ding str ateg ic lon g- ter m co ntr acts.

Over 260 ,000 employees in more than 60 countr ies

Allo catio n o f e mp loyee s in 2 011, acco rdin g t o geo grap hic locat ion (fu l l-time eq u iva len t)

201 0* 201 1

S ales (US$ bil lion ) 78. 0 94. 0

E bitda (US$ b illi on) 8.5 10. 1

O per ating inc ome (U S$ bill ion ) 3.6 4.9

N et inc om e (US$ bil lion ) 2.9 2.3

S hipments (mil lio n ton nes) 85. 0 85. 8

S teel pr oduc tion (mi lli on tonne s) 90. 6 91. 9

O wn ir on ore produc tion (mil lion ton nes)** 48. 9 54. 1

O wn c oal pr oduc tion (mi lli on tonne s)* * 7.0 8.3

155

Diversified leader in steel and mining

T op steelm akers 2 011* ( mil lio n tonn es o f cr ude ste el) 4 th largest iron ore p rod uce r (2 01 1, mil l ion ton nes )

374

192

149

54 48 46 3621

Val

e

Rio

BHP

Arc

elor

Mitt

al

For

tesc

ue

Angl

o

Met

inve

st

Evra

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* S ou rce : S B B 201 2

* * Inclu des no n-c onso lidat ed affiliat es

Diversified steel business (by product and geography) with expan ding mining operations

166

Geographical reach

* L atin Am er ica in clud es M exico .

Marke t po sit ion by reg ion

Le a de r inN orth A me ric a

Le ad e r in La tin A me ric a*

N o 1 inEu ro pe L ea der

in th e CIS

Le ad er in Af rica

Arc e lorMit ta lO the rs

Emerging markets continue to of fer the best organic growth potential for ArcelorMittal

S up erior de mand growth po tential

W e hav e the p latfo rm a nd experience :

A lready the s teel marke t lea der in Latin A merica, C IS a nd A frica

A rc elorMittal foc us area s fo r gro wth ar e Braz il

W e als o have JV p rojec ts in the M iddle East and China

Industrial and commercial network focus on market sustainabili ty and growth opportunity

6

177

ArcelorMittal main markets Automotive

W orldwide no.1 sup plier for au tomotive steels with a leading m ar ket sh are of around 18%. W orldwide indus trial pre senc e v ia about 4 0 co ating lines in Euro p e, Nor th Amer ic a, S outh

A merica and A fr ica.

Construction Globally, th e la rges t s ing le m arket for st eel: a 715 m ill ion tonne stee l c onsumption ma rk et c ompris ed of

diversified produc ts E merging ma rkets represent mor e than 50% of the squ are me ters co ns truc ted ea ch y ear global ly . A rc elo rMittal is a w orld leader wi th ov er 2 6 mi ll io n tonnes of pr oduc ts deliv ered to the bui ldin g and

cons tr uc tion sec tor in 2011

Packaging New p ack aging conc epts c ons tantly de signed to ach ieve di ffer enti atio n by stee l s olutio n

(bottle c an, easy open e nd...). Complement ary indus trial networ k in Eur ope w ith p roduc tion plants and serv ice cen tres near

cus tome rs ' can mak ing fac ili ties.

The leader in automotive steels

8The Group Management Board (GMB) Lakshmi N. Mit tal C ha irm an a nd C EO , resp o nsible for sh are d se rvi ces

(i ncl . p urc ha sin g, le ga l, IT, sh ip ping a nd en erg y), h uma n re so urce s, in te rn atio na l a ffai rs, in te rn al a ssu ran ce, he al th an d sa fety an d mining

Aditya Mittal C FO, re spo n sible fo r Flat Ca rb on E uro pe , i nve stor re la ti on s an d co mmu nica ti on s

Mich el Wurth R esp on sible fo r Lo ng Ca rbo n Wo rld wide

Go nzalo Urquijo R esp on sible fo r AAC IS (exc lu ding China an d Ind ia ), D istri bu ti on Solutio n s, Tu bu la r Prod uc ts a nd corp or ate re spo n sib ili ty

Sudhir Mah esh wari R es po nsible for co rpo ra te fi na nc e, M&A, Ind ia a n d Ch in a , ri sk man ag e men t

Davinder Ch ugh R esp on sible fo r sh are d se rvic es (re po rtin g to C EO)

Peter Kukielski R esp on sible fo r Mining

Lou is Schorsch R esp on sible fo r Fla t C ar bon Ame ric as, gro up strate gy, C TO, re sea rch an d de ve lo pme nt, com merc ia l co ord in ati on a nd mar keti ng , a nd g lo ba l au tomo tive

Appointed by the Board of Directors, the GMB is responsible for strategic direction

ArcelorMittal Tubular Products

Key facts & four operating groups

Business structured to optimize market segments & regions

Headquarteredin Luxembourg

25 industrial units in 12 countries

Designed capacity of 3 million tons

2011 revenues:USD 2.3 billion

9,000+ global employees

Energy

Aktau - Kazakhstan: spiral to 56 Galati - Romania: DSAW to 52 Ostrava - Czech Republic: spiral to 32

Brampton - Canada: welded to 3 Hamilton - Canada: welded to 6 London - Canada: tubular components Marion - USA: welded to 6

Mechanical & Automotive North America

Monterrey - Mexico: welded to 6 Shelby - USA: welded to 12.5 &

seamless to 7.75 Woodstock - Canada: welded to 7

Chevillon - France: welded to 5 Hautmont - France: welded to 5 Iasi - Romania: welded to 8 Karvina - Czech Republic: welded to 6 Krakow - Poland: welded to 6

Mechanical & Automotive Europe

La Victoria - Venezuela: welded (energy, mechanical, standard to 12)

Unicon

Annaba - Algeria: seamless to 14 Ostrava - Czech Republic: seamless to 10 Roman - Romania: seamless to 20 Vereeniging - South Africa: seamless to 6

Jubail - Saudi Arabia: seamless to 16 (under construction)

Confidential Information

19

20

ArcelorMittal Tubular Products Key Figures

20

-

0.5

1.0

1.5

2.0

2.5

2010 2011 2012F

Sales (US$ billion)

Sales (US$ billion)

29%

35%

14%

22% Energy

Mech. & Auto - North America

Mech. & Auto - Europe

Unicon

Sales by Operating Group - 2012 Forecast

-

0.4

0.8

1.2

1.6

2.0

2010 2011 2012F

Shipments (million tonnes)

Shipments (million tonnes)

-

2.0

4.0

6.0

8.0

10.0

2010 2011 2012F

No. of Employees (000s)

No. of Employees (000s)

ArcelorMittal Tubular Products is the most diversified global tube producer in terms of types of products and geographiesConfidential

ArcelorMittal brings certain strengths to the project which will be key to its success

Global leadership and reputation for excellence in Steel & steel products World leadership in steel research

11 research centers globally with 1,300 full time researchers and an annual R&D spend of over $300 million

the state of the art research facility in Belgium is specialized in supporting energy products and will support development of premium grades and connection technology for AM tubular businesses including AMTPJ

Global marketing and sales presence: present in every geographical region important to steel and energy

products including Venezuela and Saudi Arabia (with AMTPJ) Existing relationships with most of AMTPJs prospective customers Will ease the market entry and commercial ramp-up

Management team with experience in managing a global tubular products business with an with annual sales of over $2 billion

What we need Our Saudi partners to support the project with infrastructure (gas,

utilities etc) and long term relationship with Saudi Aramco21

R&D Gent centre in Belgium

A laboratory dedicated to the development of industry products from metallurgy over surface to application behavior

Fully equipped chemical characterisation laboratory

Extensive electron microscope facilities

Complete coating laboratory including novel curing techniques and corrosion laboratory

All major welding and cutting techniques available ((hybrid) laser, SAW, MIG/MAG/TIG)

Forming and rapid prototyping capabilities

Complete facilities for electromagnetic characterisation

Large experience in Finite Element Modeling

Wide range of casting possibilities

5 rolling stand of which 2 continuous

Multi-purpose dynamic annealing line with transverse flux inductor

Complete mechanical testing facilities

Advanced characterisation equipment like dilatometry, torsion and easy access to high speed-compression

Complete sampling preparation facilities including waterjet cutting

Unique reactive continuous annealing simulator

Fully equipped hydrogen lab

Unique facilities in processing, characterization and testing of metal alloys

Unique facilities in processing and characterization of metal alloys

Completely integrated metallurgical processing center


Regrouping of existing equipment and competences of ArcelorMittal R&D Gent / OCAS, the Belgium Welding Institute and Laboratory Soete of Gent University on the Metal Research Campus in Gent

Among others: Complete HIC/SSC testing facilities 5-wire SAW pilot Large scale testing (wide plate testing,

fatigue testing on threaded pipes, buckling tests, etc.)


ArcelorMittal global R&D capabilities

Around 1,300 full time researchers

Annual R&D expenditure of $300 million (2011)

Number one R&D in the industry

Working on all development axes

Research into products & steel solutions

Process research

Technical assistance to the plants

Worldwide network of 11 research centers, further supported by a network of scientific and academic partners worldwide

R&D spending focused on 7 areas:

Automotive, Packaging, Construction, Energy, General Industry, Long products and Special Plates

R&D Key challenges in accordance with the Group strategy

Product: Differentiated product offer Geography: Support the transfer of technology

between plants Value chain: Transverse projects optimising the

product value along the complete value chain from mining to finished products

Research & development enables to realize our ambitions in technological innovation and sustainability

strongly supporting specialtiesArcelorMittal R&D

Steel chemistry & production simulation

Main potential areas for cooperation and development

Definition and optimization of steel chemistry for all the target products (OCTG, Line pipe, HPI, others)

Simulation of heating/quenching and tempering cycles on different grades to fine tune the heat treatment process at Jubail mill

New product development

Training & technical support

Support to Jubail laboratory (exchange of information on sour service testing and potential training to Jubail lab staff)

Specific on-demand technical support

Sour service grades (T95, C110 and proprietary grades) especially used in the MENA region

Proprietary OCTG premium connection technology


Growing segment in the OCTG market

Sour service demand will continue to grow as drilling is increasingly moving to more difficult environments

Higher margin with limited competition

Sour service OCTG is produced by a limited number of high-end suppliers

Margins are so far considerably higher than for normal heat treated OCTG

Essential for premium connections

Sour service OCTG is always requested with premium connections

Around 15% of global premium OCTG demand is with sour service grades

Middle East is the largest regional market for sour service:

Total regional demand of ~150 Kt High presence of sour oil and sour gas in the producing basins of Saudi Arabia, Kuwait, Qatar and Iran, in deep drilling with high pressure and high temperature

Sour Service OCTG is a critical application for the success of Jubail as it is a highly profitable product ArcelorMittal has an R&D program for T95 and other proprietary sour service grades to support the development of value added products for Jubail

Relevance of sour service OCTG grades for Jubail


AMTPJ Market

Construction23%

Oil & Gas Industry

40%

Steel Service Center &

distributors14%

M achinery & industrial

equipment11%

Converting & processing

4%Automotive &

trucks6%

Electrical equipment

2%

World apparent demand for Pipes & Tubes (mt)*

Global growth of Pipes & Tubes is in line with the overall steel market but it offers specific opportunities to AM

Breakdown of consumption of Pipes & Tubes*

0

2 0

4 0

6 0

8 0

1 0 0

1 2 0

1 4 0

2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 E 2 0 0 9 E 2 0 1 0 E 2 0 1 5 E

C A G R o f 3 - 4 %

6

1822 22

29

2

Africa LatinAmerica

Middle East CIS China DevelopedWorld*

Pipes and Tubes consumption per capita (kg/year)*

Key specific opportunities in Pipes & Tubes OCTG: The growth of the Oil Country Tubular Goods market and

specifically the high end market is expected to grow at strong rate as oil reserves need to be replaced and drilling complexity increases.

High end mechanical tubes: Strong growth expected in technical products, such Drawn Over Mandrel tubes, benefiting from global market growth in construction and agricultural machinery

New solutions in Automotive: Automotive market growth expected to be limited except for high technological solution to reduce weight

Africa, Latin America, Middle East and CIS regions: Strong growth expected in those regions supported by high oil prices

AMTPJ Market

Seamless OCTG & Line pipe applications drive the demand in these regions

2011, 100% = 1.9 Million metric tons

75%

25%

Middle East Africa USA

2011, 100% = 4.0 Million metric tons 2011, 100% = 0.8 Million metric tons

Seamless OCTG and line pipe are the major categories

Other seamless categories include boilers for power generation and gas processing and standard seamless pipes for general infrastructure

Seamless OCTG and line pipe are the major categories

Other seamless categories include boilers for power generation and gas processing and standard seamless pipes for general infrastructure

Some quantities for mechanical pipes as well

U.S. seamless market is driven by OCTG mainly, followed by line pipe

Mechanical is a major category represented mainly by automotive, heavy equipment and other applications

Standard pipes for construction and pressure pipes for power plants complete the market

86%

14%

88%

12%

AMTP Jubail will be focused on serving the Oil & Gas industries along the upstream, midstream and downstream activities

AMTPJ Market

AMTP Jubail natural markets

Algeria Libya

Nigeria

Egypt

Sudan

Angola

Tunisia

Gabon

Congo

Saudi

Oman Yemen

UAE

Iraq

Syria

Qatar Kuwait

North Africa Egypt Algeria Libya Tunisia Sudan

West Africa Mauritania Senegal Sierra Leone Liberia Cte d'Ivoire Ghana

East Africa

Somalia Kenya Uganda Tanzania Mozambique Zimbabwe Madagascar

Middle East Domestic market

Saudi ArabiaIraqBahrainQatarYemen

Others Middle EastUAEKuwaitOmanSyria

Uganda

Mozambique

Tanzania

Kenya

Zimbabwe

Madagascar

Somalia

Equatorial GuineaCte d'Ivoire

LiberiaGhana

Mauritania

Senegal

Sierra Leone

Cameroon

Nigeria Cameroon Eq. Guinea Gabon Congo Angola

South Africa

AMTPJ Market

Geographic location & product range of AM Energy mills

* Joint venture.

275

300

100

50

600

45

60

50

320Ostrava

Roman

Vereeniging

Annaba

Jubail*

Galati

Aktau

Seamless Spiral LSAW

Rolling capacity by millkT/yr

Energy mills locations

10

OD Range sizeInches1 3 4.5 16 20 32 561876 12 14

Energy units are concentrated in Europe, Africa & Middle East We are mainly focused in the seamless energy markets

AMTPJ Market

Saudi Aramco

South Africa mill approved for LP & OCTG, Ostrava approved for OCTG Local Jubail team in regular touch with Aramco- A special Aramco Day is planned soon Premium connection team in regular contact with Drilling department

KOC

ADCO

Have a strong relationship with KOC and major pipe line contractors since last 15years and are regular supplier

Already given a brief to KOC regarding our upcoming mill in KSA

Have been a regular supplier for almost 6 years to ADCO and its related group companies . Introductory Presentation has been made to ADCO of our new facility.

Leverage on ArcelorMittals existing business relations in the Region

Network of Agents in Kuwait, Abu Dhabi, Qatar, Oman, Egypt, Tunisia, Libya

We have existing relationship with Major EPCs in Middle East , who have been expanding to Africa as well:

NPCC Abu Dhabi Petrofac Sharjah Technip France / Dubai Dodsal Dubai JGC Japan / Algeria Hyundai Korea / Abu Dhabi VM Gulf Abu Dhabi CUEL Thailand ENI / SAIPEM Italy Fluor Corporation- USA

Global Project Package Specialists has been developed keeping in view the new facility. Viz.

DSTC Dubai Gerab UAE / KSA Van Leeuwen Holland / UAE Trouvay Cauvin Dubai / UK Groupe Genoyer - France NOV Wilson USA / UAE Cunado Group Spain Kurvers- Germany/UK/ UAE

AMTPJ Market

International capabilities beyond MENA

Office in Houston, Texas - established since 2005 6 people covering seamless line pipe and OCTG and large diameter pipes Existing relationships with all major distributors in U.S. Have been supplier to major drilling operators ArcelorMittal brand very well established in US Market with sales >100Kt/year

USA

South America

ArcelorMittal owns Unicon, the largest welded pipe maker in Venezuela Main pipe supplier to PdVSA, the National Oil Company of Venezuela Established industrial and commercial capabilities Developing Oil Field Services business ArcelorMittal International has sales network in entire South America

India New relationships has been developed with Subsea pipe laying companies in India and abroad:

ONGC - OCTG Oil India - OCTG BHEL - Line & Alloy Carbon Steel Pipes Reliance - Line Pipes & OCTG

L&T - Line , Alloy & Structural Pipes EIL - Line Pipes GSPC - OCTG Thermax - Alloy Pipes

L&T Essar SWIBER Leighton Welspun

VM Gulf Hyundai PunjLlyod

Have a strong historical presence in India with supplies and strong relations with:

AMTPJ Market

Sales & Marketing

AMTPJ Market

ArcelorMittal Tubular Products Al Jubail (AMTPJ) signed a Sales & Marketing Agreement with ArcelorMittal, who through its distribution network, has to market and sell each Product which is in excess of the AMTPJ Market requirements, in priority to the Middle East and North Africa and any remaining surplus in other regions, all in the best interests of the Company and with a view to reach the full capacity of the Companys plant;

Key Comparative Advantages

Key Competitive Advantages

MENA region is the fastest growing market for seamless pipes in the world

Very attractive market for premium grades / qualities Saudi Aramco is the largest consumer of seamless pipe in the

MENA region (approx 400 k MT p.a.) and is actively promoting local production

Local Producer status expected to further ease entry into Aramco including supply of premium segments

Proximity to markets like Iraq and Iran will be hugely attractive once the political situation normalizes (already happening with respect to Iraq)

Mill with state of the art technology, able to produce to the highest quality specifications

One of only 2 seamless pipe production units (and the only one with a PQF Mill) in the whole of Middle East North Africa (MENA) region which consumes an annual volume of approx 3M MT.

Cost of the project is very competitive when compared to competition (Tenaris Veracruz brownfieldexpansion project ($850M), V & M Sumitomo Brazil greenfield project including 1M Mt of round billet production for approx $3 BLN)

Low operating costs due to technology and prices of utilities & infrastructure Electricity $0.04 / KWH Natural Gas $0.75 / MBTU Land lease cost of approx 4.5 SAR per sq. m p.a. Low logistics cost for land and sea for the target markets due to plant location Projects financing at SAIBOR + 450 bps (approx overall) at a debt-equity ratio of 75:25

Cost Advantages due to:: Shipping & Storage costs of seamless pipes into the region are expensive as specialized handling is required;

Outbound shipping cost from the region is low thereby providing AMTPJ with a cost advantage over international manufacturers; and

Cheaper labor in Saudi Arabia vs Europe provides further cost advantage to AMTPJ.

Opportunity for further expansion investment in billet production for the pipe mill can further enhance the margins at an attractive ROI for incremental investment

Other Advantages AMTPJ has signed a long term raw material supply agreement with ArcelorMittal Ostrava. AMTPJ has a management agreement with ArcelorMittal Tubular Products Luxemburg. AMTPJ signed a Sales & Marketing Agreement with ArcelorMittal who will, through its distribution

network, have to market and sell all products not sold in AMTPJs priority markets of MENA, in the international market. The agreement is structured with a view to reach full capacity of the AMTPJs plant.


Saudi Aramco discard any doubt about the continuation of their long term projects, although they mention there could be delays on their beginning

Their projects are long term base and somehow benefited by the current economical situation Saudi Aramco mentioned that short term volatility is nothing new in the Oil & Gas industry

The construction boom in the ME might cool off, putting Saudi Aramco in a more advantageous position to negotiate

Equipment and qualified personnel are also likely to be easier to obtain as other projects in the region are canceled or delayed, both in the industry, construction and infrastructure sectors


Projects Financials

Total Project Cost is US $997.2M (including Financing Charges).

COMPARED TO RECENT COMPARABLE SEAMLESS MILL PROJECTS,

AMTPJ Project STILL COMPATATIVE >>>>>>

Projects Financials

Projects Cost

997.2

Total Project Cost is US $997.2M (including Financing Charges).

COMPARED TO RECENT COMPARABLE SEAMLESS MILL PROJECTS,

AMTPJ Project STILL COMPATATIVE >>>>>>

Projects Cost

Projects Financials

DESCRIPTION MUSD MSAR

1. PROJECT COST- Project Cost 907.2 3,402.0- Financing Cost 90.0 337.5TOTAL PROJECT COST 997.2 3,739.5

2. MEANS OF FINANCING- Arcelor Mittal (38.25%) 114.4 429.2- AlTanmiah (36.75%) 110.0 412.3-New Investor (25.00%) 74.8 280.5TOTAL EQUITY [ 30 % ] 299.2 1,122.0

- SIDF 160.0 600.0- Bank Loan 377.6 1,416.0- New Loan 160.4 601.5TOTAL LOANS [ 70% ] 698.0 2,617.5

TOTAL EQUITY + LOANS [ 100% ] 997.2 3,739.5

Means of Finance

Projects Financials

Projects Key Performance (Full Production)

Projects Financials

Gross Margin (%) 35.97%EBITDA Margin (%) 23.24%EBT (%) 14.65%Return on Capital - ROC (%) 43.69%Return on Investment - ROI (%) 14.16%Return on Equity - ROE (%) 39.48%Asset Turnover (%) 87.10%Return on Assets (%) 12.76%

Projects IRR 12.53%

REVENUE (US$X 1000) 891,973EBIDTA (US$X 1000) 207,302EBT (US$ X 1000) 130,696

Equitytotal Investment

Projects Financials

The Opportunity

The Opportunity

An opportunity to acquire a direct equity stake in AMTPJ (25%), the biggest Seamless Steel Pipes manufacturer in the Middle East, developing a 600 Kilo-tons/year Seamless Steel Pipes (OCTG & Line Pipes) manufacturing in Saudi Arabia.

More than 84% of overall project milestones have been achieved and completed including receipt of gas supply from the Saudi government, and commercial production expected to commence in Dec 2013.

Given its partnership with ArcelorMittal, the project has many advantages. AMTPJ also has multiple cost advantages which provide it with pricing advantage compared to international producers.

The Middle Eastern market for Seamless pipes is currently being supplied almost completely by imports. This provides a regional manufacturer like AMTPJ with an immense business opportunity.

AMTPJ

36.75%38.25%

Project Cost: $ 997.2M

Raising Capital to $299.2M (30% of total Project Cost) is in progress.

Total Partners Equity (100%)= $299.2M

AM Share (38.25%) : $114.6M

Tanmiah Share (36.75%) : $109.8M

New Investor (25%) : $ 74.8M

New Investor

25%

Photos from the site

Photos from Site

Thank youFeb 2013

amtpj project info memo_deh_9 mar 2013

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