Abu Dhabi: Abu Dhabi Ports has signed a 35-year concession agreement to develop, manage and operate the strategic Port of Fujairah on the UAE’s east coast.
In a statement on Tuesday, the two entities have announced the establishment of Fujairah Terminals, a new operational arm wholly owned by Abu Dhabi Ports, to enhance existing infrastructure in addition to managing all container general cargo, RoRo (wheeled cargo) and cruise ships at the port.
The agreement also includes deepening of berths to 16.5 metres to allow bigger vessels to dock at the port of Fujairah, building an approximate 300,000 square metre yard of storage space as well as an additional one-kilometre quay to accommodate the expected growth in the number of ships arriving at the port.
Abu Dhabi Ports will also work on equipping the Fujairah Port with new and advanced equipment, as well as new IT systems to bring efficiency to operations.
The total investment in the project is not known but Abu Dhabi Port’s chief executive officer captain Mohammad Juma Al Shamsi said the significant investment will see Abu Dhabi Ports share best practices with Fujairah Port to further complement services offered at both Khalifa Port and Zayed Port.
“This agreement will offer clients on the east coast more options, it will also allow the re-export of goods that arrive at Khalifa Port to India, Pakistan and east Africa, in addition to receiving general cargo for clients in the Northern Emirates,” Al Shamsi said.
“The agreement has numerous mutual benefits, including the witnessing of significant growth in the Port of Fujairah in the coming years with the objective of being able to receive vessels of all sizes, in addition to an increase in freight operations, general cargo and passenger services.” he added.
Abu Dhabi Ports will commence with the development of berths and yards in 2018. The port will remain operational during this time to service existing and new clients.
Additional capacity and new quay cranes will begin operations in 2021, Abu Dhabi Ports said. The port’s capacity is expected to reach 1 million twenty-foot equivalent units (TEUs) and 700,000 tons of general cargo by 2030.
Fujairah port, the only multi-purpose port on the eastern seaboard of the United Arab Emirates, is strategically important. It is located on the UAE’s Indian Ocean coast, close to the Strait of Hormuz, a narrow waterway carrying a fifth of the world’s traded oil.
Dolphin Energy gas pipeline — that supplies liquefied natural gas to the UAE from Qatar — also passes through Fujairah. Abu Dhabi is also building a refinery with a capacity of up to 400,000 barrels per day.
Fujairah also has a facility for Very Large Crude Carriers (VLCCs) that was inaugurated last year with an investment of $175 million (Dh642.7 million). The new jetty is expected to help the UAE and other Gulf countries to securely ship oil to the rest of the world, bypassing Strait of Hormuz, the narrow channel that regional rival Iran has in the past threatened to close.
An expert monitoring developments in the region told Gulf News that Fujairah port is becoming an increasingly important transport and refuelling hub due to uncertainty in the region and issues with other regional ports.
“It’s another way of Abu Dhabi protecting their billion-dollar Habshan-to-Fujairah pipeline investment. It’s also a smart commercial move, no doubt part of the quid pro quo to Abu Dhabi agreeing to fund more infrastructure investment in Fujairah.”
Thangapandian Srinivasalu, CEO of Essar Oil, UK said the decision benefits both parties.
“[It is a] very strategic decision to bring together the synergies of the Emirates of Abu Dhabi and Fujairah, which will be beneficial for both. Fujairah needs large funds to develop the port quickly to compete with Oman where large investments are planned in Sohar. Abu Dhabi can also start loading VLCCs from Fujairah.”
The new concession agreement comes after DP World terminated its Fujairah port concession agreement in April this year.
DP World UAE Region entered into the agreement in 2005 on a build, operate and transfer basis to expand and develop the Fujairah Container Terminal at the port for container handling and trans-shipment.
