PARIS (AFP) – Arcelor Mittal, the world’s largest steel producer, said it had signed an agreement to form a joint venture with a Saudi partner to design and build a seamless steel tube mill in Saudi Arabia.

Under the deal signed with the Bin Jarallah Group, the mill will be built in Jubail Industrial City on the Gulf and will have a capacity of 500,000 tons per year, two thirds of which will be for tubes used in the oil industry.

Arcelor Mittal said in a statement that construction would begin at the end of the first quarter 2008 and was scheduled to be completed by the end of 2009. When operational the plant will employ 420 people.

Arcelor Mittal, which will have management and operating rights, will hold a 51 percent stake in the venture and the Bin Jarallah Group 49 percent.

“This project gives us a strategic opportunity to enter the Middle East’s — and in particular Saudi Arabia’s — thriving markets,” said Sudhir Maheshwari, Arcelor Mittal executive vice president.

“Its location provides access to international sea lanes through the … Gulf as well as proximity to energy sources.”