UAE unveils alternate oil route
As Iranian threats to close the Strait of Hormuz grew louder, the UAE quietly loaded its first cargo from its long-awaited new oil export terminal on the Gulf of Oman.
UAE oil officials and executives from oil majors such as ExxonMobil, Shell and Total gathered on the eastern coast of the country to open an alternative route for up to 75 per cent of UAE’s exports.
A European Union ban on Iranian crude imports came into effect on July 1 and Iran has been intensifying its threats to disrupt oil shipments from the Gulf. Two Iranian military officials warned that Iran could stop oil from sailing through the vital shipping lane.
Alarmed by the Iranian threats, the UAE has completed its long-delayed project to pump up to 1.8 million barrels a day (mbpd) to an export terminal on the eastern port of Fujairah.
Over the next few months, the Gulf Opec member hopes to increase exports from the new facility to around 1.5 mbpd, nearly two-thirds of the 2.4 million it typically exports each day, and the new pipeline could carry three-quarters of the UAE’s oil exports if needed.
“This is a very strategic project, it gives the options to our clients to transport larger quantities (of oil),” UAE’s oil minister Mohammed bin Dhaen Al Hamli said. “I consider this project to be complementary, so we have an alternative...to give us choice to have more than one trade route.”
The 370-km Abu Dhabi Crude Oil Pipeline carries oil from fields in the UAE’s western desert to Fujairah, a major oil storage and fuel bunkering hub on the east coast. The new terminal also has eight crude oil storage tanks each with a capacity of one million barrel.
The first cargo loaded on Sunday with oil pumped from western fields in Abu Dhabi across the mountainous north-east tip of the Arabian peninsula is to be shipped to Pakistan. The bulk of UAE’s oil is exported to Asia.
“It will make other projects viable in this area, and will also avoid more insurance and also will give access to the open sea,” Abdulla Nasser Al Suwaidi, the head of state-run Abu Dhabi National Oil Co (Adnoc) said after the opening ceremony.
- Oman’s Duqm tourist complex moves forward with government approval
- Tunisian Confederation of Industry, Trade, and Handicrafts fights nationwide unemployment levels
- Kuwait fights budget deficit: Reexamining government salaries, expatriate labor
- Construction costs fall in Dubai
- Western tourists flock to Iran, could generate $30B in new revenue