A recent Bloomberg report on the UAE's severely delayed ADCOP pipeline may have highlighted a risk arising from a trend in the GCC upstream sector to award complex projects to the lowest bidder.
The UAE's flagship 400km Habshan-Fujairah ADCOP crude export pipeline runs from the ADCO fields onshore to the Fujairah export terminal nestling on the Gulf of Oman, traversing steep mountainous terrain along the way. The project comprises the pipeline, pumping stations, an oil terminal at Fujairah, offshore loading facilities and associated facilities.
The pipeline, which was scheduled for commissioning by the end of 2010, aims to save tankers time and money by removing the final leg of their journey around the Strait of Hormuz, and bypass a body of water Iran can threaten to blockade, a short trip for which tankers have extracted a risk premium. The pipeline is part of a plan to see Fujairah – once one of the UAE’s smallest and sleepiest emirates – compete with Singapore and Rotterdam as a global oil bunkering capital.
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