DUBAI, UAE—Abu Dhabi state oil firm ADNOC has signed a deal with South Korea’s SK E&C to build the world’s largest underground oil storage facility, at a cost of $1.2 billion, in the emirate of Fujairah.
Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahyan said in a tweet on Feb. 27 the storage project would have a capacity of 42 million barrels.
“Developing this strategic oil storage mega facility ... will also support and further enable our broader trading ambitions, strengthening our ability to respond efficiently and competitively to the needs of our customers,” Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO said.
In January, ADNOC established a new trading venture with Italy’s ENI and Austria’s OMV that is expected to expand its trading markets.
When complete in 2022, the ADNOC Fujairah Underground Storage facility will be able to store three different types of crude oil, providing ADNOC with increased flexibility to export crude through Fujairah’s Arabian Sea oil terminal, ADNOC said.
The engineering, procurement and construction (EPC) contract, awarded to SK E&C after a tendering process, is to build three underground storage caverns, each with a capacity of 14 million barrels.
The contract value is expected to support the growth and diversification of the UAE’s domestic economy by $600 million.
ADNOC has undergone major changes since al-Jaber’s appointment in 2016, embarking on privatization, oil trading and expanded partnerships with strategic investors.
Recommended Reading
Pembina Cleared to Buy Enbridge's Pipeline, NGL JV Interests for $2.2B
2024-03-19 - Pembina Pipeline received a no-action letter from the Canadian Competition Bureau, meaning that the government will not challenge the company’s acquisition of Enbridge’s interest in a joint venture with the Alliance Pipeline and Aux Sable NGL fractionation facilities.
‘Unexpected’ JV to Move Permian NatGas to Gulf Coast LNG Terminals
2024-03-26 - A trio of midstream companies—Enbridge, Whitewater and MPLX—will work together to build infrastructure to transport Permian Basin natural gas to Gulf Coast LNG terminals.
SCF Acquires Flowchem, Val-Tex and Sealweld
2024-03-04 - Flowchem, Val-Tex and Sealweld were formerly part of Entegris Inc.
Exclusive: Frank Tsuru Reflects on Indigo's History, Impact in the Haynesville
2024-04-11 - Frank Tsuru, president and CEO of Momentum Midstream and former CEO of Indigo Natural Resources, looks back at the early stages of Haynesville development and the Indigo-Southwestern deal, in this Hart Energy Exclusive interview.
Chevron, Exxon in Dispute Over Hess Stake in Guyana Oil Block
2024-02-27 - Chevron’s $53 billion deal to buy Hess’ interests in the Stabroek Block offshore Guyana could be derailed as Exxon, CNOOC say they have first rights of refusal on the block’s interests.