A pipeline to send oil from the UAE directly to the Indian Ocean, instead of being shipped by tanker through the Strait of Hormuz, probably will be finished this year, said Mohamed Al Hamli, the nation’s oil minister.
The $3.3 billion pipeline to the UAE’s easternmost emirate, Fujairah, aims to “bypass” the Strait and will carry about 1.5 million barrels of oil a day, Al Hamli said in an interview in Washington.
The waterway is a chokepoint at the mouth of the Arabian Gulf for a fifth of the world’s oil supplies. Iran has threatened to block the Strait if attacked because of its nuclear program.
While the UAE is confident the Strait will remain open to tankers, the purpose of the pipeline is “to really not put too much pressure on the ships coming into the Gulf,” Al Hamli said.
The UAE is the fourth largest crude producer in the Organization of Petroleum Exporting Countries, which next meets Oct 14 in Vienna.
Al Hamli declined to comment on whether OPEC members would agree at the meeting to raise or lower oil production levels.
In a speech to an energy conference in Washington, Al Hamli said current world oil prices aren’t high when measured against higher exploration and production costs.
Al Hamli said: “The age of easily accessible oil is coming to an end. Oil prices are not high at all while “the costs of oil exploration and production have exponentially increased.”For all the latest UAE news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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