Dubai: A pipeline connecting onshore oilfields in the south-west of Abu Dhabi emirate to Fujairah, designed to avoid the strategic Straits of Hormuz shipping bottleneck, will be complete by the end of the year, according to the UAE's oil minister.
As tension escalates between Iran and regional and global actors, fears are growing that the Islamic republic might attempt to disrupt the smooth passage of oil cargoes out of the Gulf if its nuclear programme is threatened.
The $3.3 billion pipeline will carry around 1.5 million barrels a day (bbl/d). Abu Dhabi Company for Onshore Oil Operations (ADCO) was producing 1.4-1.5 million bbl/d in mid-September. The intention appears to be to transfer its entire output to Fujairah, a timely avoidance of the Iranian threat.
The US' Energy Information Agency estimates that 15 tankers a day pass through the straits, carrying 17 million barrels of crude, around half of it from Saudi Arabia, while UAE output from on and offshore fields stands at around 2.5 million bbl/d.
Speaking in Washington D.C. last week, UAE energy minister Mohammed Al Hamili said the pipeline is likely to be finished this year.
Fujairah has already made its name as a bunkering centre. In 2008, it claimed to be the second largest bunkering facility in the world after Singapore. [30/09/10]
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