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The once-sleepy fishing town of Fujairah is growing in status as one of the leading oil hubs in the region. Its rapid rise has been attributed to the strategic location of its port.
Ships using the facility in Fujairah, situated on the eastern side of the UAE, can avoid the restive Strait of Hormuz where political tensions repeatedly flare up with threats of blockade of the sea route. Ships passing through the Strait of Hormuz end up paying huge insurance charges because of the fluid political situation which has made Fujairah even more attractive.
This was one of the main reasons why an oil pipeline was constructed from Habshan to the Fujairah port to ensure UAE's oil exports will be unaffected by the tensions along the restive Strait of Hormuz. Currently, it is estimated that around 850,000 million barrels per day (bpd) of oil pass through the pipeline. The authorities are optimistic it will be able to transmit around 1.5 million bpd, more than 50 per cent of UAE's oil exports, in the future.
An oil refinery is also being planned in Fujairah which will process the crude oil and can be exported from the Fujairah Port. Also on the anvil is a Liquified Natural Gas Terminal.
Some of the key developments in the Fujairah port in recent times include building the OT2, a dedicated terminal meant to handle oil tankers. Work is in progress to accommodate large crude carriers.
Huge investments are also being witnessed in expanding the oil storage facilities in the Fujairah port. According to industry experts, oil storage facilities will be around 7.8 million cubic meters this year which can touch to 9 million cubic metres in 2015. With more investments being planned for oil storage, the authorities are scouring for land in Fujairah to build more storage facilities.
• Fujairah port riding on its location far from the Strait of Hormuz
• Oil pipeline from Habshan has boosted Fujairah's importance
• A new oil refinery and an LPG terminal are planned in Fujairah
Source: S. Dhar, Special to Properties