Adnoc has awarded a $1.21bn engineering, procurement and construction (EPC) contract to South Korea’s SK Engineering and Construction (SKEC) to build the world’s largest single underground crude oil storage project in the UAE.
The complex will have an aggregate capacity of 42 million barrels of crude oil and be located in the Emirate of Fujairah on the eastern coast of the UAE.
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Under the terms of the contract, SKEC will build three underground storage caverns, each with a capacity of 14 million barrels, deep below ground level.
Apart from enhancing the country’s position as a reliable supplier of crude oil, the proposed underground project will allow Adnoc to manage and optimise its delivery schedule and support its broader move into trading.
Adnoc Group CEO Dr Sultan Ahmed Al Jaber said: “Construction of the world’s largest single underground project ever awarded for oil storage will enhance the UAE’s energy security, in line with the wise guidance of the country’s leadership.
“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.”
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By GlobalDataAdnoc began works on the project last year and has already completed the first phase of the underground storage complex, involving the construction of an access tunnel.
The storage facility is expected to be ready in 2022 and will store three different types of crude oil.
It will facilitate crude export through Fujairah’s Arabian Sea oil terminal.
Last month, the company entered a partnership with Eni and OMV to create a trading joint venture. As part of the partnership deal, Adnoc also offered minority stakes in its refining business to the oil firms.
