The UAE emirate of Fujairah is set to double its oil storage capacity by 2014 as it continues its expansion to become one of the world’s biggest oil supply hubs.
By the end of this year, the port will house an oil storage capacity of 4.83 million cubic metres, which is set to expand to 10.5 million cubic metres by the end of 2014.
Fujairah occupies a strategic position outside the Gulf, allowing the UAE to export oil and oil products without vessels passing through the Strait of Hormuz bottleneck.
The emirate will also be served by the 1.5 million barrels a day (b/d) Abu Dhabi Crude Oil Pipeline (Adcop) later this year, enabling the port to receive the majority of the UAE’s crude production.
The increase in oil storage capacity will be driven by eight separate expansions and new projects, including 1.3 million cubic metres added by VTTI Fujairah Terminals (VTTIFTL) and 855,000 cubic metres by Vopak Horizon Fujairah (VHFL), respective subsidiaries of Dutch groups VTTI and Vopak.
In addition, Singapore-based oil trader plans to build a 1.125 million b/d oil storage project by 2014 and the local Primestar Energy is set to establish a 640,000 b/d terminal in 2013.
Fujairah’s strategic position on the Gulf of Oman was enhanced when Iran threatened to close the Strait of Hormuz – which channels around 35 per cent of the world’s seaborne oil – in a diplomatic spat with the UAE’s Western allies earlier this year.
“It is true we occupy an extremely strategic position outside the Gulf,” says a spokesman from the Port of Fujairah. “The Adcop pipeline project is a significant development. As well as providing a Gulf product source avoiding the congestion of Hormuz, it will provide part of the feedstock for the refinery project.”
The $3bn refinery project will be operated by Abu Dhabi-based International Petroleum Investment Company (Ipic), which is about to enter the front-end engineering design phase.
“This, plus the significant private investment in tank storage to cater for additional and established trading and bunkering facilities, means that Fujairah will become one of the world’s largest oil supply hubs,” adds the spokesman.
Ipic has also partnered Abu Dhabi-based Mubadala Development Company to build a major liquefied natural gas (LNG) terminal in Fujairah.
|Oil storage capacity additions in Fujairah (thousand cubic metres)|
|*=By end of 2014. Source: Port of Fujairah|