UAE pipeline bypassing Hormuz now 50% complete, state oil company says

DUBAI- A new crude oil pipeline that bypasses the Strait of Hormuz and which the United Arab Emirates began building last year is now 50% complete, the CEO of state oil giant ADNOC, Sultan Al Jaber, said on Wednesday.

Iran has largely kept the waterway critical for global oil and gas supplies shut to all ships apart from its own since the U.S.-Israeli strikes in February, sending energy prices and inflation surging, fanning fears of an economic downturn.

The Abu Dhabi Media Office publicly revealed the project's existence for the first time last week, saying the UAE will accelerate construction of a new ​oil pipeline to double its export capacity via the port of Fujairah by 2027.

Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed directed ADNOC to fast-track the West-East Pipeline project during an executive committee meeting, the media office said.

"Today, it's already almost 50% complete, and we are accelerating its delivery toward 2027," Al Jaber said during a live-streamed Atlantic Council event.

"Right now, too much of the world's energy still moves through too few choke points. That is exactly why the UAE made the decision more than a decade ago to invest in infrastructure that bypasses the Strait of Hormuz," Al Jaber said.

The existing Abu Dhabi Crude Oil Pipeline (ADCOP), also known as the Habshan-Fujairah pipeline, can carry up to 1.8 million barrels per day and has proved crucial as ​the UAE seeks to maximise exports from the Gulf of Oman coast, just outside the strait.

Al Jaber said some of ADNOC's facilities had been directly targeted and some infrastructure directly hit and the assessment of damage was ongoing. It will take in some cases weeks and in others months to return to full operational capacity, he said.

(Reporting by Yousef Saba in Dubai and Ahmad Ghaddar in London; Editing by Andrew Heavens and Tomasz Janowski)