Abu Dhabi's Strategic Pipeline Venture to Begin Operations in 2011

---

Researched by Industrial Info Resources (Sugar Land, Texas)--The Abu Dhabi Crude Oil Pipeline (ADCOP) project initiated by International Petroleum Investment Company (IPIC) (Abu Dhabi, United Arab Emirates) in 2006 is set to begin operations in 2011. Upon completion the 220-mile pipeline will transport about 1.5 million barrels per day (BBL/d) of crude oil from the Habshan oilfields in Abu Dhabi to the port of Fujairah on the east coast of Saudi Arabia, totally bypassing the Hormuz Strait, the lifeline of the oil and gas sector in the region.

About 15% of the world's oil demand is fed by this channel, through which 13 million barrels of oil are transported each day to Western countries. Because of the volume of traffic in the 33-mile-wide passage, congestions are common, and the journey to the loading docks in Abu Dhabi takes almost 19 hours.

Further, the Hormuz strait is also exposed to the political issues in the region. Iran has already threatened to block the route in case of any military action from the West.

IPIC's decision to avoid the strait is expected to provide a secure transport channel for Abu Dhabi's crude oil in addition to saving transport time and cost. The pipeline is also expected to help stabilize fluctuations in global oil supply and pricing.

The ADCOP project also includes the setting up of storage terminals and a pumping station in Fujairah. The $160 million contract for the storage system at Fujairah has been awarded to Belleli Energy SpA (Mantova, Italy). The first two storage tanks will be set up early next year, while the complete storage system is expected to be in place in by the end of 2010. Converteam Group SAS (Massy, France) will supply variable-speed drive systems for oil pumping stations in Habshan, Sweihan and Fujairah, where oil tankers will be loaded.

The construction work on the ADCOP pipeline is currently under way and the project is expected to be completed by August 2011. The ADCOP infrastructure has been designed to cater to additional capacity requirements that may arise. With Abu Dhabi National Oil Company's production capacity expected to reach 4 million BBL/d by 2020, ADCOP will be able to handle up to twice its initial volume (3 million BBL/d) in case the Hormuz Strait route is totally avoided in future.

IPIC also has plans to set up a refinery in Fujairah in addition two other refinery projects slated for construction in Pakistan and Morocco. The storage facilities in Fujairah are expected to feed the local refinery.

View Project File - 98500110 98500139

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.