Fujairah pipeline ready this month

By night, the lights of dozens of ships anchored off this eastern Emirati port create the mirage of a far-off city at sea.

The crowded anchorage reflects Fujairah's rise as one of the world's busiest maritime refuelling stations. Soon it will also become a vital new exit route for Arabian crude oil destined for world markets.

The UAE is nearing completion of a pipeline through the mountainous emirate that will allow it to reroute the bulk of its oil exports around the Strait of Hormuz at the mouth of the Gulf, the path for a fifth of the world's oil supply.

With the Emirates' new pipeline, oil from fields deep in the Abu Dhabi desert would travel 236 miles (380 kilometers) overland and across the barren Hajar mountains to this fast-growing port on edge of the Indian Ocean.

Once it's running at full volume, the pipeline will let the UAE get two-thirds of its peak oil production to market even if the strait is shut. That's about 10 per cent of the total 17 million barrels of oil a day that currently goes through Hormuz.

The director general of Fujairah municipality, Mohammed Saif Al Afkham, told The Associated Press he expects the pipeline to be commissioned this month.

"This will add a lot to the shipment of oil, and it will make it faster and easier instead of going to the Gulf," he said.

Officials have not announced a firm starting date. But Al Afkham's comments and those of other Emirati officials suggest exports could begin soon.

Energy Minister Mohammed bin Dhaen Al Hamli told a Paris conference last month the four-foot-wide pipeline is finished and is being tested.

It is designed to handle 1.5 million barrels of crude a day. Al-Hamli has said that figure could rise to 1.8 million barrels.

Al Hamli and the state-run International Petroleum Investment Co., which is building the pipeline, did not respond to Associated Press requests for comment about the project. Neither did the China National Petroleum Corp., a subsidiary of which was contracted to construct the pipeline.

For Fujairah, the pipeline is a way to solidify its standing as an emerging petroleum hub.

About two dozen ships on average already pick up fuel for their own engines in Fujairah every day, according to editor Ada Taib at Bunkerworld, an online site that tracks the industry. Port authority estimates show it is now the world's second busiest maritime refueling spot globally after Singapore, she said.

The waterfront around Fujairah port is dotted with more than 100 towering fuel silos. Eight larger storage tanks, each capable of holding 1 million barrels of crude, mark the terminus for the new oil pipeline.

Even more energy infrastructure is on the horizon.

IPIC, the Abu Dhabi company building the crude pipeline, is planning a $3 billion, 200,000 barrel-a-day refinery at Fujairah. It and another government-backed firm, Mubadala Development Co., in March announced they will develop a terminal at Fujairah to receive liquefied natural gas for domestic use.

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