Dubai: Abu Dhabi will start pumping the first crude oil by mid-year through a new giant pipeline that will enable it to bypass the strategic Strait of Hormuz waterway by exporting as much as 1.8 million barrels a day via Fujairah, where plans for a grassroots refinery are also regaining momentum, a person close to the situation said.
Initial crude exports from Fujairah, located outside the Arabian Gulf on the Gulf of Oman, are due to start in the second half and will reach full capacity in early 2012 once the pipeline is fully operational, the person told Zawya Dow Jones this week.
The $3.29 billion, 400-kilometre pipeline will enable Abu Dhabi to export as much as 70 per cent of its crude from Fujairah, where tankers will be able to pick up the oil instead of sailing an extra day into the Arabian Gulf via the Strait of Hormuz, the narrow waterway watched over by Iran.
The strait is one of the world's busiest tanker routes through which Arabian Gulf oil producers ship their crude exports. About 18 million barrels of crude oil, or 20 per cent of global consumption, are being shipped through the route every day.
The new pipeline, known as the Abu Dhabi Crude Oil Pipeline, is being built by China Petroleum Engineering and Construction Corp, a subsidiary of China National Petroleum Corp.
The project client is the Abu Dhabi government investment firm International Petroleum Investment Co.
