July 15, 2012 8:28 PM

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UAE ships its first oil cargo bye passing strait of Hormuz

United Arab Emirates shipped its first oil cargo from its Fujirah oil export terminal on Sunday bye passing the strait of Hormuz to Pakistan. The export terminal has the capacity to pump up to 1.8 million barrels per day. Exports from the new facility would start at a few hundred thousand barrels a day and rise gradually over the next few months. Until now, the UAE, like Qatar and Kuwait, had been entirely dependent on Strait of Hormuz to export its crude.The Fujirah pipeline ends its dependence on the strait of Hormuz. The 370-km Abu Dhabi Crude Oil Pipeline carries oil from fields in the UAE's western desert to Fujairah, a major oil storage and fuel bunkering hub on the east coast. The new terminal has eight crude oil storage tanks each with a capacity of one million barrel. The bulk of UAE's oil is exported to Asia.The move is significant in the context of repeated warnings of closure of the Strait of Hormuz by Iran over the sanctions imposed by the western nations. Flows through the Strait of Hormuz last year accounted for almost 20 percent of oil traded worldwide.The UAE Oil Minister Mohammed bin Dhaen al-Hamli said that it is a very strategic project which gives the options to its clients to transport larger quantities of oil. He underlined the importance of the project by saying that it is a complementary project so that it has an alternative choice for more than one trade route. The head of state-run Abu Dhabi National Oil Co. (ADNOC) Abdulla Nasser Al Suwaidi, said it will make other projects viable in the area, and will also avoid more insurance and will give access to the open sea.

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