Hormuz oil bypass: six firms in pipeline

Abu Dhabi's IPIC has invited six firms to bid for the pipeline engineering contract.
Hormuz oil bypass: six firms in pipeline
By Reuters
Wed 04 Jul 2007 02:49 PM

Abu Dhabi's International Petroleum Investment Company (IPIC) has invited six firms to bid for the engineering and design contract on an oil pipeline to bypass the Strait of Hormuz, industry sources said on Wednesday.

Over 13 million barrels per day of crude, more than 15% of global supply, flows from Gulf producers through the shipping chokepoint, according to the International Energy Agency.

Analysts fear Iran could seek to impede trade through the route if Western powers resort to military action in the row over Tehran's nuclear programme.

The 1.5 million bpd pipeline would allow the United Arab Emirates, the world's sixth-largest oil exporter, to pump more than half of its 2.3-2.4 million bpd of exports to the terminal of Fujairah on the Gulf of Oman.

IPIC has invited U.S.-listed Chigago, Bridge & Iron Co, UK-based JP Kenny Limited, the UK-based Penspen International Limited, France's Technip, U.S.-based VECO Engineering and Australia's WorleyParsons to bid for the front-end engineering design contract, the sources said.

The contract will be awarded at the end of July or in early August, they said.

The 320 km pipeline would link state oil firm Abu Dhabi National Oil Company's Habshan oilfields to the port of Fujairah, a major ship bunkering hub for vessels refuelling as they enter and leave the Strait.

The new pipeline will also lower shipping costs for the UAE's oil exports, as shippers charge a premium due to the war risk for entering the strategic channel.

Germany-based ILF Consulting Engineers will manage the project.

IPIC is wholly owned by the government of Abu Dhabi, the capital of OPEC-member UAE, which holds most of the Gulf state's oil wealth.

The pipeline could also supply a new refinery in Fujairah that IPIC plans to build.

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