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The Organization of Arab Petroleum Exporting Countries (OAPEC) has referred to the planned project to build a 200,000 barrels per day (bpd) refinery in Fujairah as 'significant and vital'.

OAPEC noted in its June bulletin that the US$3 billion refinery, to be built by Abu Dhabi's government-owned International Petroleum Investment Company (IPIC), is one of Abu Dhabi's strategic initiatives.

IPIC is the company responsible for building the 1.5 million bpd oil Abu Dhabi Crude oil Pipeline (ADCOP) from Abu Dhabi to Fujairah, which will allow the world's third largest oil exporter to send approximately 60 percent of its crude exports to Fujairah, thus bypassing the Strait of Hormuz.

The Fujairah refinery will be located near the ADCOP main oil terminal and the UAE deep water export terminals in Fujairah, and will be designed to process UAE crudes such as Murban, Upper Zakum and Dubai.

The proposed facility will source crude from the onshore Habshan field in Abu Dhabi through the new crude oil pipeline with products from the refinery being sent mainly to China, India and Southeast Asia.

The planned refinery project would enable Abu Dhabi to move up the value chain from being a net crude oil exporter to also being a prominent regional marketer of refined goods.

The Project Management Consultancy (PMC) contract for the front end engineering and design phase of the Fujairah refinery was awarded to Shaw Stone & Webster in April 2011. The project is currently in its pre-front end engineering and design phase (Pre-FEED), with project completion anticipated to occur by mid 2016.

"IPIC is giving this project high priority and importance," the government-owned company said.

”This is an exciting opportunity to combine IPIC’s financial strength and experience of existing portfolio of companies in implementing this project. The refinery project in addition to being of strategic importance will create social and economic benefits for Fujairah and other Northern Emirates as well as creating employment opportunities during the operational phase in the UAE," said IPIC's Managing Director Khadem Al Qubaisi.