Abu Dhabi National Oil Company (ADNOC) has announced that phase one of the ADNOC Fujairah Underground Storage project, involving the construction of an access tunnel, is complete. The facility is billed as one of the world’s largest underground crude storage facilities and, once complete, it will have a capacity of 42 million barrels of crude oil.
The facility is expected to be delivered in 2022 and will bolster the UAE’s position as a reliable supplier of crude oil. It will be able to store three different types of crude oil and will provide ADNOC with increased flexibility to export crude through Fujairah’s Arabian Sea oil terminal.
According to a statement, a $1.21 billion engineering, procurement and construction (EPC) contract has been awarded to SK Engineering and Construction (SKEC), to construct three underground storage caverns. Each cavern will have a capacity of 14m barrels.
The EPC contract is said to be the largest single project award for an underground crude oil storage facility. ADNOC notes that approximately 50% of the contract spend will feed back into the UAE’s economy through it’s In-Country Value program.
The agreement was signed by Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, and Jae Hyun Ahn, SKEC president & CEO, in the presence of Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and President Moon Jae-in, President of the Republic of Korea, at the Blue House, in Seoul.
“Construction of the world’s largest single underground project ever awarded for oil storage will enhance the UAE’s energy security, in line with the wise guidance of the country’s leadership. Importantly, developing this strategic oil storage mega facility in Fujairah will also support and further enable our broader trading ambitions, strengthening our ability to respond efficiently and competitively to the needs of our customers, while also providing ADNOC with greater flexibility to proactively respond to market needs and commercial opportunities,” said Dr Al Jaber.
He added, “ADNOC has a long and successful history of working with Korean companies as partners in our upstream concession areas, as contractors for major projects across the oil and gas value chain, and as a customer of Abu Dhabi’s crude oil and our refined products. This project is a testament to the strong strategic partnership between UAE and South Korea and to the capability of SK Engineering and Construction Co. Ltd, given the scale, sophistication and value of this construction.”
Jae Hyun Ahn, CEO of SKEC concluded, “We are progressing well in our project with ADNOC in the construction of the world’s largest single storage facility in hard rock, located in Fujairah. SKEC are committed to providing high quality services, as well as supporting the local UAE economy, as we grow our expertise in global energy storage.”
No.of Reads (5)