The Straits of Hormuz oil pipeline construction has been delayed but it could be ready for operations in the spring. The Alaskan Pipeline (Photo) is still operating after many years but the flow has slowed down. New wells need to be approved for drilling on the North Slope to speed-up production. Politics has stopped most of this for now, but recent permit approvals give some hope. -Editor
“A pipeline that would allow crude oil from the United Arab Emirates to bypass the Strait of Hormuz separating it from Iran has been delayed because of construction difficulties, two people with knowledge of the matter said.”
“As many as 270 construction issues have pushed back the completion date, said the two people, declining to be identified because they’re not allowed to speak publicly on the matter. The $3.3 billion project won’t be ready until at least April, one of them said. Abu Dhabi, holder of most of the U.A.E.’s crude reserves, had planned to start exports in January, 2011 through the pipeline to a port outside the strait, Dieter Blauberg, the project’s former director, said in May 2009. ‘The pipeline is almost complete, so hopefully it will be operational, say, within six months, by May-June,” U.A.E. Oil Minister Mohamed al-Hamli told reporters in Abu Dhabi today, confirming more time is needed to finish it. “It’s a big project, there’s a lot to do.”
“The 1.5 million barrel-a-day link would ensure the U.A.E. can export crude without risking a blockade at Hormuz, where fully laden tankers exit the Persian Gulf with one-fifth of the world’s traded oil. The possibility that Iran might try to close the waterway has intensified as Europe prepares to follow tougher U.S. sanctions on the country over its nuclear program, and prompted a U.S. pledge to take action if the strait is blocked. Iran has started to enrich uranium at its Fordo plant, the official Kayhan newspaper reported yesterday.”
“That pipeline would carry pretty much all of Abu Dhabi’s oil,” Robin Mills, an analyst at Manaar Energy Consulting in Dubai, said January 5. “It’s a critical bit of infrastructure, and it is remarkable it hasn’t been completed.” An average of 14 crude tankers sail each day through the strait, which is 21 miles (34 kilometers) wide at its narrowest point, according to the U.S. Energy Information Administration. “They’ve invested in capabilities that could, in fact, for a period of time block the Straits of Hormuz,” Dempsey said. “We’ve invested in capabilities to ensure that if that happens,
we can defeat that.” Once ready, the pipeline will transport crude from Habshan, the collection point for Abu Dhabi’s onshore oil -Bruce Stanley, Ayesha Daya and Anthony DiPaola 1-9-12 Bloomberg.net
On Friday news, commotion in Nigeria threatens to remove a huge supply of light crude oil. With so many refinery shutdowns coming for change-over-repairs and out right closings, gasoline goes to $4.
