Dow Jones/Dubai
The UAE is accelerating oil exports via a new pipeline that bypasses the Strait of Hormuz and plans to ship around 6mn barrels of crude through it this month, an official said yesterday.
“We are planning to increase exports from Fujairah pipeline gradually on a monthly basis,” Sultan al-Mehairi, marketing and refining director at Abu Dhabi National Oil Co, told Dow Jones Newswires. “We could be reaching up to 6mn barrels this month.”
People familiar with the matter said in March that the pipeline, which opened in July and can transport 1.5mn bpd of crude, is still operating at limited capacity and most cargoes are being shipped from Abu Dhabi’s Jebel Dhanna oil terminal.
UAE officials previously said the pipeline would be fully operational by the first quarter of this year.
News last year that the route was getting close to becoming operational provided some relief to oil markets rattled by Iranian threats to block the Strait, through which one-fifth of the world’s oil is currently shipped.
The 400km link, which costs around $4bn, will enable Abu Dhabi, the largest UAE member, to export as much as 75% of its crude at periodic intervals from Fujairah, located outside the Arabian Gulf on the Gulf of Oman, where tankers can pick up the oil instead of sailing into the Arabian Gulf via the Strait of Hormuz.
The Abu Dhabi Crude Oil Pipeline, or Adcop, was built for the Abu Dhabi government investment firm International Petroleum Investment Co, or IPIC.
Iran last year increased its threats to close the Strait of Hormuz if the European Union went ahead with an embargo on Iranian oil-the latest step taken to pressure Tehran into giving up a nuclear programme that the West suspects is aimed at securing atomic weapons.
The Strait is one of the world’s busiest tanker routes through which Gulf oil producers ship their crude exports.
