Abu Dhabi National Oil Company (Adnoc) Executive Vice-President for Trading Philippe Khoury revealed that the company plans to build a pipeline for gasoline, diesel, and jet fuel exports. This pipeline is expected to bypass the Strait of Hormuz. This was reported by the Financial Times reported on Tuesday. Additionally, the pipeline will boost UAE’S energy capacity alongside other projects such as the MERAM Project and drive economic growth.

Khoury said that Adnoc invests “a lot of time seeing how we can reinforce our channels of supply and our systems. This is to ensure that if the crisis continues longer, as we think it might, we still have the ability to supply our customers in an efficient and competitive manner.”

The United Arab Emirates already operates a crude oil pipeline to the port of Fujairah.  Also, the nation is building a second line expected to double capacity next year. Adnoc is also considering a separate west-east pipeline that could help other Gulf producers bypass the strait.

Why Would Adnoc Decide to Build a New Pipeline in the Region

Opting to expand infrastructure or build a new pipeline bypassing the Strait of Hormuz is driven primarily by two main factors. These factors are the critical need to mitigate severe geopolitical and macroeconomic risks. However, as a narrow maritime chokepoint handling roughly 20% to 21% of the world’s global petroleum trade, the Strait is highly vulnerable to regional conflicts and blockades. These are threats that can severely threaten supply continuity. Disruptions or complete closures within the passage can block nearly two-thirds of normal Gulf oil exports. This will eventually force upstream producers to shut in fields due to a rapid exhaustion of domestic storage capacity.

Also, by utilizing or expanding inland bypass infrastructure such as the existing Abu Dhabi Crude Oil Pipeline (ADCOP) which connects the Habshan oilfields directly to the export terminal at Fujairah on the Gulf of Oman, ADNOC secures a direct outlet to the Indian Ocean. This strategic diversification bypasses the vulnerable chokepoint entirely. Therfore, this will insulate the UAE’s core export revenues from regional conflict. As a result, it will significantly lower maritime insurance premiums. Eventually, thus will reassure major international buyers of uninterrupted energy security.

New UAE Pipeline Project Factsheet

Developer: ADNOC

Operator: ADNOC

Commodities: Gasoline, Diesel, and Jet Fuel

Key Purpose: To be used mainly for exports