Gulf States Consider Energy Pipeline Project to Avoid Strait of Hormuz

JAKARTA - The Gulf countries are reconsidering pipeline projects to avoid the Strait of Hormuz, following increased concerns over dependence on the energy route.

This reflects concerns that disruptions in the strait could threaten oil and gas exports from the Gulf, prompting officials and industry players to revisit options previously deemed too expensive or difficult.

The current crisis underscores the strategic value of Saudi Arabia's East-West pipeline, a 1,200-kilometer route that transports oil to the Red Sea port of Yanbu.

Quoted by ANTARA from Anadolu, Thursday, April 2, a Gulf energy executive called the pipeline a "genius" move in hindsight.

Saudi Aramco CEO Amin Nasser called the line a "main route we are currently utilizing," while considering capacity expansion and terminal development in the Red Sea.

The report said long-term options could include a trade corridor from India to Europe via the Gulf.

A number of executives also assessed that a pipeline to the Mediterranean would eventually be built.

"People need to take control of their own destiny, together with their friends," said NewMed Energy CEO Yossi Abu.

However, executives warned of major hurdles.

Cat Group CEO Christopher Bush said the reconstruction of the East-West pipeline would cost at least 5 billion US dollars (around Rp85 trillion).

Meanwhile, the more complex route from Iraq through Jordan, Syria, or Turkey could require funds of 15-20 billion US dollars.

He added that the security risk in Iraq is still high, including unexploded bombs and the presence of militant groups.

Routes to Oman also face technical challenges in desert and mountainous areas, as well as potential political disputes related to ownership and operation.

In the short term, the most realistic option is to expand existing infrastructure, including the Saudi East-West pipeline and the Abu Dhabi-Fujairah line.

Bush said Gulf policymakers now consider the issue a pressing one.

"Many thinkers are studying this now. This is a big problem," he said.

The US-Israeli war with Iran and tensions in the Strait of Hormuz have disrupted regional energy flows and pushed up global prices.

On March 2, Iran announced navigation restrictions on the shipping lane and warned it would attack ships that passed without permission.

Around 20 percent of global oil supplies pass through the strait daily. Increased insecurity has driven up prices as well as shipping and insurance costs.