The Abu Dhabi National Oil Company (ADNOC) is building the world's largest single underground project ever awarded for oil storage, with a capacity of 42 million barrels of crude oil, the first phase of which has been completed, the company announced Wednesday.
According to ADNOC's statement, the company awarded an Engineering, Procurement and Construction (EPC) contract to South Korea's SK Engineering and Construction Co. Ltd. (SKEC) to construct three underground storage caverns, each with a capacity of 14 million barrels in the Emirate of Fujairah on the eastern coast of the United Arab Emirates.
"The EPC contract is the largest for a single project award for underground crude oil storage in the world and is valued at AED 4.4 billion ($1.21 billion) with approximately 50 percent of the contract spend feeding back into the U.A.E. economy through ADNOC’s In-Country Value program," the press release read.
ADNOC said works commenced in 2018 and the first phase of the ADNOC Fujairah Underground Storage, involving the construction of an access tunnel, has been completed.
"When complete in 2022, the ADNOC Fujairah Underground Storage will be one of the largest facilities of its kind in the world and able to store three different types of crude oil, providing ADNOC with increased flexibility to export crude through Fujairah’s Arabian Sea oil terminal," it added.
According to the statement, the underground storage will strengthen the U.A.E.'s position as a reliable supplier of crude oil as well as give ADNOC greater flexibility, allowing it to manage and optimize its delivery schedule and support its broader move into trading. It will also enhance its position as one of the key trading and supply partners in Fujairah’s growth as a global oil and products storage and trading hub.
U.A.E. Minister of State and ADNOC Group CEO Dr. Ahmed Al Jaber said the facility would also enhance the country's energy security.
"Importantly, developing this strategic oil storage mega facility in Fujairah will also support and further enable our broader trading ambitions, strengthening our ability to respond efficiently and competitively to the needs of our customers, while also providing ADNOC with greater flexibility to proactively respond to market needs and commercial opportunities," he added.
ADNOC is one of the world's leading diversified energy and petrochemicals groups with a daily output of about 3 million barrels of oil and 10.5 billion cubic feet of natural gas.
By Hale Turkes