ABU DHABI: The Port of Fujairah due to its beneficial location is to become the second largest bunking port of the world. This positioning of Fujairah Port has increased the foreign trade of Fujairah by 40% volume which will be beneficial for both UAE and Saudi Arabia.
The growth of the Port of Fujairah was given a major boost in 2008 when it was announced that plans to enhance its infrastructure were confirmed after securing a $245 million syndicated loan from National Bank of Fujairah and Commercial Bank of Dubai.
Subsequently Fujairah port trading volumes were valued at AED 13 billion while the chamber witnessed a rise in the number of new and renewed licenses during 2012 by five per cent.
This investment comes as Fujairah is gaining noticeable attention as a risk-hedging option away from Strait of Hormuz political instability. In this regard, the UAE government has committed $3 billion dollar to develop a 240-mile oil pipeline from Abu Dhabi into Fujairah, with a capacity of 1.5 million barrels a day, directing about 70 per cent of its daily crude exports through Port of Fujairah. The new pipeline was built will reduce the reliance on Arabian Gulf oil terminals, while also reducing shipping congestion through the Straits of Hormuz, cutting insurance costs and saving up to three days sailing time.
The government has also committed another $4 billion dollar to set up a refinery at the port’s premises. Other leading Oil & Gas operators and traders have taken aggressive steps towards securing storage spaces at Port of Fujairah, including Saudi Aramco which has leased space for almost one million barrels of gasoline. By the end of 2014 Fujairah port’s capacity is expected to increase to about 10.5 million tonnes, up from 4.8 million tonnes in 2012. Saudi Arabia is the biggest investor in oil storage capacity outside of the UAE, accounting for 19 per cent of the total spending.
At present the Port of Fujairah Anchorage can accommodate up to 100 vessels at any time along the 1.4 kilometre long main quay and two bulk loaders for construction aggregate are fully operational and capable of loading 6000 tons of material per hour. Increased volumes of trading in Fujairah port is indicated by many companies who are leasing increased space for barrels, as they seek to increase the volume of refined products they buy and sell.
As of June 2014 the GCC construction projects in the pipeline are worth $2.8 trillion. Leading the region’s future growth in the construction sector is Saudi Arabia, the third largest non-oil trader with UAE, with approximately SAR 21 billion in trade in 2013, who has experienced a steep rise in contracts awarded in 2014. These early stages of the current boom have resulted in the total value of projects currently planned or underway in Saudi Arabia exceeding $700 billion.
