Baoshan Iron and Steel Co (Baosteel), China’s biggest listed steelmaker, has said that it has signed an initial pact with the world’s top crude oil producer, Saudi Aramco, to study building a steel plate factory in Saudi Arabia.

The nonbinding Memorandum of Understanding is one of several agreements the state-owned Aramco has signed as it looks to expand its industrial investment programme, a Reuters report said.

In a filing to the Shanghai Stock Exchange, Baosteel said that the companies intend to carry out a feasibility study on building a plant to make heavy steel plates, which are commonly used in the construction industry.

The MoU agreement follows a similar agreement signed last year between Aramco and Posco, the South Korean steel giant.

In its filing, Baosteel stated that the intended cooperation is ‘in line with Saudi Arabia’s Vision 2030’, and the Chinese government’s ‘One Belt, One Road’ initiative.

Saudi Arabia’s Vision 2030 is a plan to diversify the Middle East kingdom’s economy away from oil, while the Belt and Road Initiative is Chinese President Xi Jinping’s flagship trade and infrastructure scheme, the report explained.

Expanding internationally and building steel plants overseas has always been part of Baosteel’s long-term strategy, the company’s filing added.