UAE readies oil pipeline bypassing Strait of Hormuz as tensions mar region

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An aerial view of Vopak Horizon Fujairah Oil Terminal, UAE. Photo - Constructionweekonline.com

A crude oil pipeline bypassing the strategic Strait of Hormuz is almost complete in the United Arab Emirates and will start flowing oil from next month, a Reuters report said Monday.

The 480-km pipeline with a capacity of up to 2.5 million barrels per day, known as the Abu Dhabi Crude Oil Pipeline (ADCOP) project, will allow UAE to avoid the risky waters of Persian Gulf and give Fujairah terminal on the Gulf of Oman a new lease of life.

“Oil could flow through the pipeline from end-December initially at 1 million bpd and gradually increase to 2 million bpd,” an industry source with direct knowledge of the pipeline told Reuters on condition of anonymity.

“There’s a hurry to get this operational as the noises about an attack on Iran gets louder,” he added, adding that the pipeline’s opening would ease worries in the Gulf.

Western powers are mounting pressure over Iran as the Middle Eastern nation develops what it calls a ‘peaceful civilian nuclear energy’ programme. US-led coalition insists Tehran is working on designing a nuclear bomb which will pose a direct threat to Israel.

US warships patrol Strait of Hormuz, the most important oil transit channel in the world, to ensure its grip on global oil supplies and energy resources outflow. According to the US Energy Information Administration, some 15.5 million barrels or about a third of all sea-borne oil passed through this strategic point in 2009.

The 6.4 kilometre wide channel between Iran and Oman oversees the shipping of bulk of crude oil exports from the UAE, Saudi Arabia, Kuwait, Iran and Iraq, along with the liquefied natural gas (LNG) from world’s biggest exporter Qatar.

The pipeline would link Fujairah’s oil port terminal with Abu Dhabi’s Habshan oilfields that are under the supervision of Abu Dhabi National Oil Company (ADNOC). Abu Dhabi government-owned International Petroleum Investment Company (IPIC) has funded the project with China Petroleum Engineering and Construction Corporation the principal construction contractor.

“The construction of the pipeline is completed. They are now evaluating the operational costs and the logistics of it,” another Dubai-based source said. “They are recruiting new people as it is a big operation,” he added.

The UAE sources, while confirming timeline for the startup of the project, requested anonymity as the government is yet to make an official announcement for the commissioning of the project.

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