DP World to build new UAE terminals to reduce Hormuz reliance

DUBAI — DP World will develop two new container terminals in Fujairah on the United Arab Emirates’ eastern coast, the global ports operator said on Wednesday, as the Gulf state works to reduce its reliance on the Strait of Hormuz amid the Iran war.

“The development will expand DP World’s UAE capacity and gateway network, giving customers greater choice, flexibility, and connectivity across regional and global trade routes,” the Dubai-based company said in a statement.

Once operational, the project will increase DP World’s total container handling capacity in the UAE to nearly 22 million twenty-foot equivalent units (TEUs), up from the current 19.4 million TEUs. It will also significantly expand the company’s general cargo and Roll-on/Roll-off (Ro-Ro) capabilities.

The U.S.-Iran conflict, which began on February 28, has killed thousands of people, while Iran’s restrictions on energy shipments from Gulf states have contributed to rising inflation worldwide.

Vessel traffic through the Strait of Hormuz declined further on Tuesday, according to shipping data, as Tehran’s near-total blockade of the key waterway continued and security concerns remained amid ongoing attacks by the United States and Iran.

Fujairah Expansion

DP World reached an agreement in principle with the Fujairah Ports Authority for a 50-year concession to develop two new terminals, creating “a new deep-water trade gateway on the UAE’s east coast.” Fujairah’s ports have become a crucial trade route for the UAE since the effective closure of the Strait of Hormuz.

The planned Al Rugaylat container and multi-purpose terminal will be capable of handling up to 2.5 million TEUs annually, along with 1.7 million tonnes of general cargo and 190,000 car equivalent units (CEUs). The Dibba General Cargo terminal will add up to 3.6 million tonnes of annual general cargo capacity.

DP World, one of the world’s largest port and logistics operators, did not disclose financial details of the investment but said the project would be developed in phases. Construction is expected to take between 24 and 30 months from the start of work.

The new gateway will be able to accommodate “the latest generation” of ultra-large container vessels and will be connected to DP World’s flagship Jebel Ali Port through the company’s inland logistics network.

Jebel Ali Port handled 15.6 million TEUs last year, contributing to DP World’s total consolidated volume of 56.1 million TEUs.

-Reporting by Federico Maccioni; Editing by Nia Williams/Reuters