Abu Dhabi awards pipeline contract to CNPC units

June 4, 2007
CNPC said Abu Dhabi's IPIC has awarded a contract to CNPC's two pipeline engineering and construction units, China Petroleum Pipeline Bureau and China Petroleum Engineering & Construction, to build a 360-km, 48-in. oil pipeline in the UAE.

Eric Watkins
Senior Correspondent

LOS ANGELES, June 4 -- China National Petroleum Corp. said Abu Dhabi's International Petroleum Investment Co. has awarded a contract to CNPC's two pipeline engineering and construction units, China Petroleum Pipeline Bureau and China Petroleum Engineering & Construction Corp., to jointly build a 360-km, 48-in. oil pipeline in the UAE. The pipeline will extend from Abu Dhabi's Habshan oil field to an export terminal at Fujairah. Starting and completion dates were not given.

The line will carry 1.5 million b/d of crude oil, about 55% of the Emirates' production. A third of the crude will be transported to a planned $5 billion refinery in Fujairah, while the remainder would be piped to the export terminal, bypassing the Strait of Hormuz.

Under an original 2006 agreement, IPIC and ConocoPhillips were expected to form a 51%-49% joint venture to own and operate the 500,000 b/d Fujairah refinery complex (OGJ, July 24, 2006, Newsletter). In April, 2007, however, ConocoPhilips said rising costs had cast doubts on its participation in the refinery, so IPIC last month said it would revise its plan for the refinery.

Contact Eric Watkins at [email protected].