Fujairah occupies a unique strategic role in the union of seven emirates that make up the UAE. The emirates location on the Gulf of Oman coast gives it direct access to the Indian Ocean, a geographical advantage that has attracted investment in key energy infrastructure over the past decade and has given rise to several major projects planned over the coming years.
Fujairah is the fourth-biggest market for engineering, procurement and construction (EPC) spending in the UAE, behind the major population centres of Abu Dhabi, Dubai and Sharjah, but well ahead of the other small Northern Emirates.
Since 2009, Fujairah has awarded almost $6.5bn-worth of EPC contracts, largely driven by construction and oil storage projects, according to regional projects tracker MEED Projects.
However, in terms of planned projects, Fujairah is by far the third-biggest market in the UAE, with a project pipeline of nearly $9bn twice the size of Sharjah and larger than all the emirates outside of Abu Dhabi and Dubai combined.
By far, the largest scheme planned in Fujairah is the 200,000 barrel-a-day (b/d) oil refinery, which will be the second biggest downstream facility in the UAE. The projects owner, Abu Dhabis International Petroleum Investment Company (Ipic), has received bids on two packages and is expected to award the deals, worth an estimated $3.5bn, next year.
The location of the refinery will allow Fujairah to receive crude from Abu Dhabis onshore fields and imported sources, and export refined products without ships having to pass through the Strait of Hormuz bottleneck to the Gulf.
Fujairah has long been a beneficiary of geographical advantages such as its position near the Arabian Gulf, says Bora Bariman, head of energy and marine at National Bank of Fujairah. It is also its direct access to the Indian Ocean as well as its global shipping lanes that differentiates the emirate as a gateway between the Middle East and the rest of the world.
Not only does Fujairah benefit from the abundant supply of resources from its hinterland, it is well-served by the interlinked infrastructure provided by the UAE, be it physical pipelines, refineries and terminals or software such as the well-developed legal framework and capital markets that draw investment from global players into the country.
Another major scheme utilising Fujairahs location is the liquefied natural gas (LNG) import and regasification terminal, which is also out to bid. This will allow the UAE to import gas internationally without shipping through the Strait of Hormuz.
Other major projects in the pipeline include a $800m biofuels refinery planned by Dubais Petrixo Group and various expansions of the emirates oil storage capacity, all of which further cement Fujairahs status as a global oil supply and trading hub.