IPIC Awards $460 Million in Deals on Abu Dhabi-Fujairah Pipeline
DUBAI, Dec 31, 2007 (Dow Jones Newswires)
International Petroleum Investment Co., or IPIC, said Monday it awarded contracts worth $460 million to three companies to supply pipes for a domestic crude oil export line linking the U.A.E.'s emirates of Abu Dhabi and Fujairah.
IPIC, an Abu Dhabi government investment firm, split the contracts for a total of 225,000 tons of coated steel pipe between Sumitomo Corp. (8053.TO), Salzgitter Mannesmann International and Jindal Group of India, the company said in an emailed statement.
First delivery of the pipe, which will have a 48-inch diameter, is expected in July 2008, IPIC said.
Abu Dhabi, the largest U.A.E. sheikdom, plans to build the 360-kilometer oil export pipeline to transport up to 1.5 million barrels a day of crude to Fujairah to bypass the Strait of Hormuz, the narrow waterway through which Persian Gulf oil producers ship their crude exports.
About 17 million barrels of crude oil, or 20% of global consumption, are being shipped through the tanker route every day.
Oil prices have risen over the past two years partly on fears Iran could block exports from the region through Hormuz if tensions with the U.S. over the Islamic republic's nuclear program escalate.
IPIC, which manages global energy investments in excess of $10 billion for the Abu Dhabi government, has appointed WorleyParsons Ltd. (WOR.AU) to carry out the front-end engineering design on the so-called Abu Dhabi Crude Oil Pipeline, or Adcop, project, according to the statement.
ILF Consulting Engineers is the project manager while China Petroleum Engineering and Construction Corp. is the nominated engineering, procurement and construction contractor pending the conclusion of a final agreement, IPIC said.
The Adcop project, being fast-tracked for completion in 2009, will involve building storage and terminal facilities for the crude export from Fujairah.
The crude oil will be sourced from the onshore Habshan field in Abu Dhabi. The emirate pumps 95% of the crude in the U.A.E., which is the third-largest oil producer in the Persian Gulf after Saudi Arabia and Iran.
IPIC is also studying the option to build an export refinery in Fujairah despite ConocoPhillips (COP) dropping out of the project earlier this year.DUBAI, Dec 31, 2007 (Dow Jones Newswires)
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