UAE underground oil store to boost “energy security”

Abu Dhabi’s state oil firm said Wednesday it has signed a $1.2 billion deal to build a storage facility on the Arabian Sea, as it seeks to bypass waters Iran has threatened to close. Abu Dhabi National Oil Co. (ADNOC) said it had awarded a contract to South Korea’s SK Engineering to build the underground facility which will hold up to 42 million barrels of oil in Fujairah emirate, in the east of the United Arab Emirates.

The project “will enhance the UAE’s energy security”, ADNOC’s CEO Sultan al-Jaber said in a statement. Fujairah’s coast is located on the Gulf of Oman, at the entrance to the Arabian Sea -- beyond the Strait of Hormuz, a major artery for regional oil shipments that Iran has repeatedly threatened to block due to tensions with Gulf nations.

Abu Dhabi is the westernmost of the UAE’s seven emirates and holds more than 90 percent of the federation’s estimated 98 billion barrels of oil reserves. ADNOC’s confirmation of the deal came as Abu Dhabi’s Crown Prince Sheikh Mohammed bin Zayed visited Seoul and work has been underway for some months. The firm said Sheikh Mohammed and South Korean President Moon Jae-in attended the signing ceremony for the $1.2bn (1.05 billion euro) project, which is slated for completion in 2022.