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UAE awards $460m pipeline contract

UAE awards $460m pipeline contract

Abu Dhabi: Government-owned International Petroleum Investment Company (IPIC) has awarded the $460m Abu Dhabi-Fujairah pipe supply contract to Japan's Sumitomo, Germany's Salzgitter and India's Jindal Saw, reports UAE news agency WAM. The project will enable the country to transport oil to Oman without having to transit the Strait of Hormuz (pictured) at the mouth of the Persian Gulf, which is the latest site of a US-Iranian stand off.

On Saturday, Iranian speedboats enacted what the Pentagon has termed 'aggressive and hostile' manoeuvres against US warships in the Strait of Hormuz, further aggravating a tense political situation between the two countries. It is possible that shipping through the strait may be disrupted as one of the consequences of an escalating row over Tehran's nuclear programme.

The 360km pipeline, which includes a terminal and storage at Fujairah, is scheduled for completion in the first quarter of 2009. Upon completion it would guarantee buyers a regular supply and would also reduce shipping costs.  [08/01/08]