IPIC's Habshan-Fujairah Pipeline Project Faces Another Setback

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Researched by Industrial Info Resources India (Delhi, India)--International Petroleum Investment Company (IPIC) (Abu Dhabi, United Arab Emirates), which is managed by the government of Abu Dhabi, has again pushed back the commissioning of its Abu Dhabi Crude Oil Pipeline (ADCOP) Project. The crude pipeline, which was scheduled to be commissioned by the end of 2011, is now likely to be online by September 2012.

The first cargo from Fujairah was previously scheduled to take-off in May 2012. A delay in the completion of certain major construction activities has been reported to be the main cause for the approximately nine-month postponement. The project had initially faced delays due to design changes and the incorporation of additional oil-metering facilities.

Originating from Habshan field in Abu Dhabi, the 370-kilometer, 48-inch-diameter oil export pipeline will supply 1.5 million barrels of oil per day to Fujairah. The UAE's flagship Habshan-Fujairah crude export pipeline would run from ADCOP's onshore fields to the Fujairah export terminal on the Gulf of Oman, traversing steep mountainous terrain along the way.

The pipeline project consists of offshore-loading facilities, a main pump station at Habshan, an intermediate pump station at Sweihan and a main oil terminal. The pipeline, developed by IPIC, which manages energy investments globally, is focused on saving tankers time and money by bypassing the Strait of Hormuz.

China Petroleum Engineering & Construction (CPEC), a subsidiary of China's state oil company China National Petroleum Corporation (CNPC), won the engineering, procurement and construction (EPC) contract for this project in 2008, through a competitive bidding route. The conceptual design of the pipeline was completed in 2006, and construction-related contracts were awarded in 2007. The construction of the pipeline kicked off on March 19, 2008.

This ambitious project aims to reduce ongoing shipping congestion through the Strait of Hormuz. As Abu Dhabi pumps 95% of the total crude of UAE, completion of this pipeline will strengthen the overall export capability on the eastern coast substantially. UAE is the third-largest oil producer in the Persian Gulf, after Saudi Arabia and Iran.

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