First oil shipment defies Iran threats

UAE opens pipeline to bypass Straits of Hormuz

GMT 13:50 2012 Monday ,16 July

Arab Today, arab today UAE opens pipeline to bypass Straits of Hormuz

UAE opens pipeline bypassing the Strait of Hormuz
Abu Dhabi - Agencies

UAE opens pipeline bypassing the Strait of Hormuz The United Arab Emirates on Sunday inaugurated a pipeline to pump oil from east coast terminals, bypassing the strategic Strait of Hormuz which Iran has threatened to shut down, state-run WAM news agency reported. The first shipment of 500,000 barrels of oil from the Habshan fields in Abu Dhabi emirate were pumped through the pipeline to Fujairah oil terminal on the Gulf of Oman, where it was loaded on a tanker headed for Pakistan.
Energy Minister Mohammad bin Dhaen al-Hameli attended a ceremony in Fujairah for the launch.
Fears of a closure of the Straits of Hormuz have intensified amid repeated threats by Tehran to close the strategic outlet in retaliation for Western efforts to choke off its oil exports to rein in Iran’s nuclear programme.
Media reports in Tehran earlier this month said Iranian MPs endorsed a bill banning Europe-bound tankers from using the Straits of Hormuz to punish EU nations which have slapped sanctions on Iran.
On Saturday, Ali Fadavi, naval commander in Iran’s elite Revolutionary Guards, said Tehran had the ability to “not allow even a single drop of oil to pass” Hormuz.
On Thursday, US officials said the United States has deployed a fleet of robot subs in the Gulf to prevent Iran from blocking the strategic Straits of Hormuz with mines in case of a crisis.
The US military has been bolstering its presence in the region and sent four mine sweeper ships in early June, joining four other mine sweeping vessels already in the region, according to its Bahrain-based Fifth Fleet.
And in late April, a squadron of F-22 stealth fighters was sent to an air base in the United Arab Emirates.
Last week, senior Abu Dhabi oil official Ali Jarwan said the Habshan-Fujairah pipeline would be fully operational in August. Construction of the 360-kilometre (225 mile) pipeline began in 2008.
In late May, Fujairah ruler Sheikh Hamad bin Mohammed al-Sharqi told AFP the pipeline will have an initial capacity of 1.5 million barrels per day rising to a maximum 1.8 million bpd.
The UAE’s current production is about 2.5 million bpd.
The new links will more than double the total pipeline capacity bypassing the strait to 6.5 million bpd, or about 40 per cent of the 17 million bpd that transits Hormuz.
The UAE and Saudi Arabia say the pipelines are not a direct response to Tehran’s threats. But oil traders and scholars say they are clear counterweight.
“Multiple pipelines would partly negate the Iranian threat to block [the Straits of] Hormuz,” Rafael Kandiyoti, senior research fellow at Imperial College London and author of Pipelines: Oil Flows and Crude Politics told the Financial Times. “Showing increasing pipeline capacity suits the purposes of Saudi Arabia.”
Policy makers have expressed doubt that Iran will ever actually carry out its threat to close the Straits for two reasons: first, it is the gateway for all its own oil exports but also for its food imports and second, the strait is so strategic that a blockade would trigger a military response from the US and perhaps also other countries.

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