The UK’s HSBC is set to be appointed financial adviser on the development of a $3bn refinery being built in Fujairah by Abu Dhabi’s International Petroleum Investment Company (Ipic).

Sources close to the situation say the UK bank is favourite to win the contract and a formal announcement is expected before the end of September.

The project involves the construction of a 200,000 barrel-a-day oil refinery at Fujairah, on the east coast of the UAE and is a key part of Abu Dhabi’s plan to find oil export routes that bypass the Strait of Hormuz, which separates the UAE from Iran.

Rising tensions with Tehran over its nuclear programme have led Abu Dhabi to seek alternatives export routes for its oil amid threats that Iran would blockade the narrow waterway, considered one of the most strategic routes on the planet because of the volume of oil exported through it.

In July, the government announced that it had shipped its first exports of crude oil from Fujairah after opening a 400-kilometre pipeline from its oil fields to Habshan. The new refinery will refine crude oil from this pipeline before it is exported.