UAE Launches Oil Pipeline To Bypass Strait of Hormuz
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Nearly three-quarters of the United Arab Emirates’ total oil exports will now leave the country via the newly opened Fujairah export terminal on the Gulf of Oman, said UAE government officials on Sunday, with the new route set to bypass the volatile Strait of Hormuz, which Iran has threatened to block.
Nearly three-quarters of the United Arab Emirates’ total oil exports will now leave the country via the newly opened Fujairah export terminal on the Gulf of Oman, said UAE government officials on Sunday, with the new route set to bypass the volatile Strait of Hormuz, which Iran has threatened to block.
The new export terminal is connected to a 370-km pipeline that stretches from UAE’s western desert to Fujairah; and will handle nearly 1.5 million barrels of oil per day by the end of this year, reported AFP, with the pipeline believed to have a maximum capacity of 1.8 million bpd.
“This is a very strategic project, it gives the options to our clients to transport larger quantities (of oil),” noted UAE’s oil minister Mohammed bin Dhaen al-Hamli, as quoted by Reuters.
“Currently you can only lift 1 million barrels a day from Ruwais (in the Persian Gulf). From Fujairah, now our clients now can bring in VLCCs (very-large crude carriers) and lift more,” he said.
[quote]”I consider this project to be complementary, so we have an alternative…to give us choice to have more than one trade route,” al-Hamli added.[/quote]Prior to Fujairah’s opening, the UAE had been exporting all of its oil through the Hormuz Strait, which is considered as the “world’s most important oil chokepoint” with 33 percent of the world’s seaborne oil supply passing through the waters.
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The ever-intensifying threats from Iran to close the strait though has led the UAE government to reconsider its options, especially after neighbours Saudi Arabia too had opened a bypass in the last few months.
According to experts, the new pipeline will also lower shipping and insurance costs for the UAE’s oil exports, as shippers charge a premium due to the war risk for entering the Persian Gulf.
[quote]“It will make other projects viable in this area, and will also avoid more insurance and also will give access to the open sea,” noted Abdullah Nasser Al Suwaidi, a senior official of Abu Dhabi National Oil Company (Adnoc).[/quote]
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The inauguration of the new oil network at Fujairah on Sunday saw numerous foreign and local dignitaries present, including U.S. ambassador to the UAE Michael H. Corbin.
Speaking to the Associated Press, Corbin called the launch “a historic step in establishing multiple routes for the vital flow of oil from the Arabian Peninsula.”
