TotalEnergies will invest in two major oil pipelines designed to bypass the Strait of Hormuz, backing Abu Dhabi’s expansion of its Fujairah export route and a planned pipeline carrying Iraqi crude through Syria to the Mediterranean.
CEO Patrick Pouyanné announced the commitments Monday at the ONS energy conference in Norway, two months after saying investment in alternative Gulf export routes had become an “absolute priority” for TotalEnergies following the paralysis of Hormuz during the Iran war. The company has not disclosed how much it will invest or what stakes it will take in either project.
“We will become partners of the pipeline moving from Baghdad to Syria, but I will also invest in Abu Dhabi, in doubling the Fujairah pipeline,” Pouyanné said, according to Reuters.
The UAE’s existing Habshan-Fujairah pipeline can carry up to 1.8 million barrels per day from Abu Dhabi’s oil fields to the Gulf of Oman, allowing those barrels to reach international markets without passing through Hormuz. Abu Dhabi plans to roughly double its bypass capacity by next year as the Iran war exposes the limits of the existing system.
TotalEnergies is making a similar hedge in Iraq, proposing an Iraq-Syria pipeline that would give Baghdad a Mediterranean export route for crude that currently leaves predominantly through its southern Persian Gulf terminals. The project could cost around $15 billion and take at least four years to complete, according to recent estimates.
“We are today probably the largest trader of oil from Iraq or from Qatar … and it’s clear to me that I need to put a certain amount of equity to invest in an alternative route,” Pouyanné told the conference.
Before the war, roughly a fifth of global oil supply moved through Hormuz. Six months of severely disrupted tanker traffic have now spurred project development into overdrive.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com
- Europe Dodges a Rhine Crisis for the Worst Possible Reason
- Oil Nears $100 as Trump’s ‘Economic D-Day’ Raises the Stakes
- China’s Renewables Boom Faces Record Clean Power Curtailments
