UAE Hormuz bypass pipeline to export in 3 months

The UAE’s strategic oil pipeline for bypassing the Strait of Hormuz is complete and exports are expected to start within three months, UAE Oil Minister Mohammed al-Hamli said on Thursday.

Initially operating at a rate of 1.4 million barrels per day (bpd), the pipeline should offer the Gulf producer an alternative route out of the narrow strait which Iran has threatened to block as western pressure to limit its oil revenues has intensified.

The United Arab Emirates has run tests on the pipeline, which has faced lengthy delays over a quality dispute with the Chinese company that built it.

“The pipeline is complete and now it’s being tested,” Hamli told an energy conference in Paris. He told Reuters later that exports are expected to start by August.

“It’s filled with crude now and exports will start within three months,” he said.

“It’s important to diversify and ease the traffic in the Strait of Hormuz,” said the UAE oil minister.

The pipeline links the Habshan oilfields to the port of Fujairah - an increasingly important oil storage terminal outside the Strait of Hormuz on the Gulf of Oman.

Hamli said the capacity of the line could rise to 1.8 million bpd.

The UAE is now producing about 2.6 million bpd and has a production capacity of around 2.7 million bpd.

The oil flowing through the pipe from Abu Dhabi will be mainly exported by ship but a portion will be used by a refinery at Fujairah.