UPDATE 1-UAE to bypass Straits of Hormuz with new pipeline-sources
* Pipeline initially flowing 1 mln bpd, total capacity 2.5 mln bpd
* Aims to provide an alternate route as Iran tensions rise
By Stanley Carvalho and Humeyra Pamuk
ABU DHABI/DUBAI, Nov 21 (Reuters) - The United Arab Emirates could soon start pumping oil via a key pipeline that will allow it to bypass the Straits of Hormuz and protect exports if Western powers resort to military action in a row over Iran's nuclear programme.
The Abu Dhabi Crude Oil Pipeline (ADCOP) project, a 480-km pipeline with a capacity of up to 2.5 million barrels per day (bpd) will allow the UAE, one of the world's top five exporters, to boost exports from its Fujairah terminal outside the Straits and on the Gulf of Oman, four industry sources told Reuters.
"There's a hurry to get this operational as the noises about an attack on Iran gets louder," an industry source with direct knowledge of the pipeline said.
"Oil could flow through the pipeline from end-December initially at 1 million bpd and gradually increase to 2 million bpd," he said, adding that the start-up of the pipeline would ease a serious bottleneck in the Gulf.
Tension over Iran's nuclear programme has increased since the International Atomic Energy Agency (IAEA) reported on Nov. 8 that Tehran appears to have worked on designing a nuclear bomb and may still be working.
The Strait of Hormuz is the most important oil transit channel in the world, with some 15.5 million barrels or about a third of all sea-borne oil passing through in 2009, according to the U.S. Energy Information Administration (EIA). U.S. warships patrol the area to ensure the safe passage. Continued...