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UAE’s new pipeline to bypass Hormuz now operational

Industry

The UAE will begin exporting almost half of its crude oil through the new Habshan-Fujairah pipeline by July 2012, bypassing the Strait of Hormuz for the first time

The UAE has begun receiving oil to its main terminal in Fujairah inaugurating its new pipeline and the first oil tanker will be loaded by next month.

The pipeline, owned by International Petroleum Investment Company, will act as an alternative to the UAE’s dependence on the narrow shipping route. The strategic 370km bypass will allow state oil firm Abu Dhabi National Oil Company (ADNOC) to supply oil from its Habshan fields in the west to its eastern port of Fujairah.

Construction on the pipeline project began in 2008 with the aim of avoiding Iran’s threats to block the strait following stricter western sanctions on its oil exports.

The project comprises the pipeline, the main oil terminal at Fujairah, offshore loading facilities and associated facilities.

The pipeline can transport up to 1.4 million barrels of oil a day, which could be increased to 1.8 million barrels per day, allowing for about 70 per cent of the UAE’s oil production to be exported via Fujairah.

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