Abu Dhabi converts Fujairah into oil and gas hub
The Abu Dhabi investment funds International Petroleum Investment Company (IPIC) and Mubadala Development Company (Mubadala) are leading more than $10 billion capital expenditure into midstream and downstream projects in Fujairah.
With direct access to the Gulf of Oman, Fujairah occupies a strategic position for Abu Dhabi and the United Arab Emirates (UAE) in short-cutting the Strait of Hormuz and its potential risks of lockout.
IPIC made the first step with the Abu Dhabi Crude Oil Pipeline (Adcop) to connect Abu Dhabi onshore oil fields in Habshan to Fujairah.
With 370 kilometers and for $3.3 billion capital expenditure, this crude oil pipeline was commissioned in July.
To supply the actual and future storage farms in Fujairah, the Adcop pipeline has a capacity of 1.5 million b/d allowing additional expansions in Fujairah.
While Abu Dhabi works to secure its oil export, the UAE strategy is also to increase their local added value on the crude oil.
In this context IPIC plans to build the Fujairah refinery and petrochemical complex.
This project will be developed in two phases where Fujairah:
– Phase 1 includes only the refinery
– Phase 2 will add an olefin plant
On the phase 1, IPIC is moving on with the Fujairah refinery to require $3.5 billion capital expenditure for 200,000 b/d of crude oil capacity.
Then IPIC selected the French engineering company Technip to perfom the front end engineering and design (FEED).
With Technip due to complete this FEEDon first half 2013, IPIC is targeting the completion in 2016 in order to transform Fujairah into oil products export platform.
IPIC and Mubadala build Fujairah LNG import terminal
In addition to secure the export of crude oil and derivatives products, IPIC and Mubadala are planning the infrastructures to guaranty the long term import of natural gas in UAE.
The population in UAE is growing and the profile of the industry is also evolving with the integration of aluminium and steel sectors boosting the power consumption.
In addition Abu Dhabi maturing oil fields request more assistance of gas injection leading the UAE to be more import dependent on gas supply.
In their joint venture, IPIC and Mubdala are planning an offshore liquefied natural gas (LNG) import terminal in Fujairah.
Designed with offshore storage capacities and regasification units, the Fujairah LNG import terminal will be built in two phases.
To proceed on fast track, IPIC and Mubadala have already initiated the first phase with a capacity of 4.5 million t/y (600 million cf/d) of LNG.
The second phase should follow closely to run into commercial operations by 2016.
With all the on going projects to increase storage capacity in Fujairah, IPIC and Mubadala will contribute to reduce the traffic of the tankers in the Strait of Hormuz in securing the Abu Dhabi export and import of oil and gas when the Fujairah refinery and offshore LNG terminal will run into commercial operations in 2015.