The threat of indefinite Iranian control over the Strait of Hormuz is prompting Gulf countries to reconsider costly plans for bypass pipelines so they can continue to export oil and gas, the Financial Times reports, writes UNN.
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Officials and industry executives say new pipelines may be the only way to reduce the Gulf countries' persistent vulnerability to strait disruptions, even though such projects would be expensive, politically complex, and take years.
The current conflict has highlighted the strategic value of Saudi Arabia's 1,200 km East-West pipeline. Built in the 1980s after fears that the Iran-Iraq "tanker war" would close the strait, it is now a key transportation route, delivering 7 million barrels of oil per day to the port of Yanbu on the Red Sea, completely bypassing the Strait of Hormuz.
"Looking back, the East-West pipeline looks like a brilliant solution," said one senior Gulf energy executive.
Amin Nasser, CEO of Saudi state oil giant Aramco, told analysts last month that the pipeline is "a major route that we are now using to our advantage."
The kingdom is now considering how to export more of its 10.2 million barrels of daily production via pipeline rather than through Iranian-controlled waters. This includes exploring further expansion of the East-West pipeline's capacity or building new routes, the publication writes.
Previous plans to build pipelines in the region have repeatedly stalled due to high costs and complexity. But Maysoun Kafafi, a senior program advisor for the Middle East at the Atlantic Council, said sentiment in the Gulf has changed.
"I feel a shift from hypothetical considerations to operational reality," she said. "Everyone is looking at the same map and drawing the same conclusions."
Kafafi said the most sustainable option, beyond individual projects, is "not one alternative pipeline, but a network, a network of corridors," though she added that this is the most difficult to implement.
In the long term, any new pipelines are likely to become part of trade routes that can move a wider range of goods beyond oil and gas, the publication writes.
One option is to revive US plans for an ambitious corridor that would run from India through the Persian Gulf and then to Europe, called IMEC, one Gulf official said, although part of that project initially included a politically complex pipeline that would go to the Israeli port of Haifa.
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Yossi Abu, CEO of Israeli company NewMed Energy, expressed confidence that pipelines to the Mediterranean Sea will be built, regardless of whether they end in Israeli or Egyptian ports.
Christopher Bush, CEO of Cat Group, a private Lebanese company that was one of the main builders of the Saudi East-West gas pipeline, said that interest in new projects was high even before the war began. "I have a lot of presentations on my desk," he said.
But the obstacles remain enormous, he added. The cost of recreating the East-West pipeline today, which would involve blasting through the hard basalt of the Hijaz Mountains on Saudi Arabia's Red Sea coast, would be at least $5 billion, Bush estimated. Proposals for more complex multilateral routes from Iraq through Jordan, Syria, or Turkey would cost $15-20 billion.
"This issue has been considered. Even preliminary engineering studies [of such routes from] Iraq are being conducted. There is a possibility that has been discussed," he said.
However, security risks include a "large number" of unexploded bombs in Iraq and the continued presence of ISIS or other militants. Pipelines running south to Omani ports would also face difficulties traversing the desert and rocky mountains, Bush warned.
Ports in Oman are not immune to Iranian security threats. Drone attacks on the key port of Salalah in recent days forced its temporary closure.
Political issues also include who will operate the pipeline and control the flow. A pipeline network would require Gulf countries to "abandon their individualistic policies and join forces. It was always considered cheaper and safer to bring a ship, load it, and send the ship sailing," Bush added.
"In the short term, the most viable options may be the expansion of the East-West pipeline, as well as the existing Abu Dhabi to Fujairah route. This will increase capacity without the complications associated with new cross-border infrastructure," the publication says.
Saudi Arabia could also develop additional export terminals on the Red Sea coast, including at the deep-water port being built for the Neom project. "I'm sure they see this as an opportunity," Bush said. "A lot of smart people are looking at all this now. It's a big problem."
One senior energy executive said that Abu Dhabi "always had a Plan B for a second pipeline to Fujairah." But they added that no decisions are likely to be made until the long-term status of the Strait of Hormuz becomes clear.
The UK is leading talks between 35 countries aimed at forming a coalition to reopen the strait.
Britain gathers 35 countries for summit on Strait of Hormuz – Politico01.04.26, 19:16
Kafafi agreed that it would take some time for Gulf states to assess the situation with the waterway, but said they now recognize that the scale of the current energy crisis demands a new way of thinking. "The conversations have moved further down the chain," she said. "I don't expect [the status quo] to return to what it was before the conflict."