January 2, 2008 / 10:36 AM / in 11 years

CORRECTED - Sumitomo, Salzgitter, Jindal win UAE pipeline deal

(Corrects name and RIC of Indian company from Jindal Steel to Jindal Saw)

ABU DHABI, Dec 31 (Reuters) - Abu Dhabi has awarded a $460 million pipe supply contract to Japan’s Sumitomo 5457.T, Germany’s Salzgitter (SZGG.DE) and Jindal Saw (JIND.BO) of India, the United Arab Emirates news agency WAM said on Monday.

The deal is part of an oil pipeline project that would allow the world’s sixth largest exporter to pump more than half of its exports to the Gulf of Oman, bypassing the Strait of Hormuz at the mouth of the Gulf.

Analysts say Iran may try to disrupt shipping through the strategic waterway if the United States resorts to military action in a row over Tehran’s nuclear programme.

Government-owned International Petroleum Investment Company (IPIC) chose the three companies among five bidding for the Abu Dhabi-Fujairah oil pipeline, the agency said.

Under the contract, pipe deliveries for the 360 km (224 mile) pipeline are to be completed by January 2009, it added.

In September, IPIC awarded Australia’s WorleyParsons (WOR.AX) an engineering and design contract for the 1.5 million barrel per day (bpd) pipeline.

Over 13 million bpd of crude, more than 15 percent of global supply, flow from Gulf Arab producers through the strategic shipping chokepoint of Hormuz, according to the International Energy Agency.

The pipeline, which would also lead to savings on shipping costs, would link state oil firm Abu Dhabi National Oil Company’s Habshan fields to Fujairah on the Gulf of Oman. The project also includes oil storage and terminal facilities for crude exports at Fujairah.

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