Abu Dhabi has set May as the start of trial operations of a pipeline that will cut across much of the UAE’s barren desert to transport massive quantities of crude from its oilfields straight to the Indian Ocean.
Oil from the emirate’s massive onshore fields will begin flowing on a trial basis in May before the project is fully commissioned a month later to allow Abu Dhabi to bypass the Hormuz Strait through which nearly a fifth of the world’s crude exports pass every day.
“The trial stage for the pipeline will begin in May…an agreement has already been signed between Adnic and I[ic,” the semi-official Arabic language daily Alittihad said, quoting ADNOC sources.
International Petroleum Investment Company, Abu Dhabi government’s overseas oil investment arm, launched the pipeline project more than years ago and officials estimated its cost at around Dh12 billion, one of the largest pipeline ventures in the Middle East.
The pipeline originates from Habshan, the collection centre for the bulk of Abu Dhabi's onshore oil output of more than half its total output.
IPIC said the 370km pipeline would transport nearly 1.4 million barrels per day of Murban crude from the emirate's main onshore oil facilities when it is fully commissioned. “Capacity could be raised later to 1.8 million bpd, accounting for more than 70 per cent of Abu Dhabi’s output,” Alittihad said.
The project comprises the pipeline, a main oil terminal at Fujairah, offshore loading facilities and other associated facilities.
The pipeline, exceeding the length of the Dolphin subsea pipeline that transports natural gas from Qatar to the UAE, traverses sandy areas east of Abu Dhabi city through Suweihan and passes west of the oasis town of Al Ain. A strategic crude reservoir has been set up in Fujairah. From there, crude oil will be loaded aboard tankers anchored in safe waters.
The pipeline will also serve a planned refinery being built in Fujairah by IPIC within its ongoing investment drive in the UAE and other countries.
In late 2008, IPIC awarded the pipes supply contracts worth around $460 million (Dh1.69 billion) to three companies: Sumitomo of Japan, Salzgitter Mannesmann International of Germany and Jindal Group of India.
In March 2009, the EPC contractor, China Petroleum Engineering and Construction Corporation, started construction work.
The UAE and other Gulf states have long considered bypassing the strategic Hormuz Strait to ensure safe flow of their massive crude oil exports, most of which pass through the narrow waterway, the only gateway to the Gulf.
The Gulf plans were prompted by recurrent attacks on shipping during the 1980-1988 Iran-Iraq war and Tehran’s threats to close Hormuz, through which hundreds of oil tankers and other vessels pass daily.
While part of Saudi Arabia's oil exports pass through Hormuz as it has terminals outside the Gulf, almost all crude exports by the UAE and other Gulf countries flow out of that narrow strait. Oman is the only Gulf nation located outside Hormuz.
Abu Dhabi, the UAE’s main oil producer which controls over 90 per cent of the country’s crude reserves, exports more than two million bpd of oil and nearly seven million tonnes of liquefied natural gas per year.