Fujairah-Abu Dhabi Pipeline to be Flowing by 2009

RigZone.Com reported that contracts have been finalized for supplies of pipes for the trans-UAE pipeline:

First delivery of the pipe, which will have a 48-inch diameter, is expected in July 2008, IPIC said.

Abu Dhabi, the largest U.A.E. sheikdom, plans to build the 360-kilometer oil export pipeline to transport up to 1.5 million barrels a day of crude to Fujairah to bypass the Strait of Hormuz, the narrow waterway through which Persian Gulf oil producers ship their crude exports.

About 17 million barrels of crude oil, or 20% of global consumption, are being shipped through the tanker route every day.

Oil prices have risen over the past two years partly on fears Iran could block exports from the region through Hormuz if tensions with the U.S. over the Islamic republic's nuclear program escalate.

The Adcop project, being fast-tracked for completion in 2009, will involve building storage and terminal facilities for the crude export from Fujairah.

The crude oil will be sourced from the onshore Habshan field in Abu Dhabi. The emirate pumps 95% of the crude in the U.A.E., which is the third-largest oil producer in the Persian Gulf after Saudi Arabia and Iran.

IPIC is also studying the option to build an export refinery in Fujairah despite ConocoPhillips (COP) dropping out of the project earlier this year.