The link, stretching from Abu Dhabi to Fujairah on the Gulf of Oman, began loading a shipment of about 500,000 barrels, Mohamed Al-Hamli, oil minister for the United Arab Emirates, said yesterday at the inauguration ceremony. International Petroleum Investment Co. spent $4.2 billion building the 423- kilometer (263-mile) link, Managing Director Khadem al-Qubaisi said at the ceremony in Fujairah.

Abu Dhabi, the U.A.E.’s capital and holder of more than 90 percent of its oil, built the export route for crude to avoid Hormuz, a narrow waterway carrying a fifth of the world’s traded oil that Iran has threatened to block in retaliation for sanctions targeting the country’s nuclear program. Construction costs were 27 percent higher than the $3.3 billion contract awarded to China Petroleum Engineering & Construction Corp. in 2008 and was delayed by 11 months.
 

“The pipeline will get used if they keep the price to load crude from Fujairah the same as loading from inside the Gulf,” said Robin Mills, head of consulting at Dubai-based Manaar Energy Consulting and Project Management. “It means that Abu Dhabi is just swallowing the cost of the pipeline, as it has been built for strategic reasons. If this was a commercial venture, they would have built it years ago.”
 

Political Maneuvering
 

An Iranian lawmaker, Mohammad-Hassan Asferi, said yesterday the pipeline’s limited capacity would keep it from obviating the need of regional suppliers to export most of their oil through the strait. The line is “propaganda and political maneuvering guided by the Western countries, especially the United States, which aims to reduce the strategic importance of the Strait of Hormuz,” according to state-run Press TV. Asferi serves on Iran’s national security and foreign policy committee.
 

The link can transport 1.5 million barrels a day of Murban crude from Habshan, a collection point for Abu Dhabi’s onshore oil fields, across a desert and mountains to Fujairah. The system can pump as much as 1.8 million barrels a day at periodic intervals, officials said yesterday. The U.A.E., the fifth- biggest oil producer in OPEC, pumped 2.61 million barrels a day in June, data compiled by Bloomberg showed.

The first oil exported from Fujairah is priced the same as Murban crude loaded inside the Gulf, three people with knowledge of the matter said this month. Abu Dhabi may later devise a separate formula including a premium to account for the cost of using the pipeline, said the people, declining to be identified because the matter is confidential. Abu Dhabi officials yesterday did not comment on pricing.

First Cargo
 

Abu Dhabi’s first export cargo from Fujairah is destined for Pak Arab Refinery Ltd., a joint venture between Pakistan’s government and IPIC, Al-Qubaisi said. IPIC owns a 40 percent stake in the plant, which regularly uses about 40,000 barrels a day of Abu Dhabi crude, of the 100,000 barrels it consumes daily, he said.
 

Abu Dhabi earlier shipped a test cargo from Fujairah to its own refinery at Ruwais, inside the Persian Gulf, said Abdul Munim Al-Kindi, general manager of Abu Dhabi Co. for Onshore Oil Operations. As the main oil producer at the emirate’s onshore fields, the company, known as Adco, will operate the pipeline and gradually ramp up capacity by year-end, he said. The network is designed to load tankers at three offshore buoys, he said. IPIC will likely charge Adco “a few cents per barrel” for use of the pipeline, Al-Qubaisi said.

Alternative Route

Al-Hamli, the oil minister, said the link gives buyers an alternative location from which to receive crude. It will allow them to fill very large crude carriers, or VLCCs, the largest class of tanker capable of carrying 2 million barrels of oil. Filling such vessels in the Gulf of Oman will reduce shipping traffic in Hormuz, he said.
 

“The pipeline is going to be beneficial because our clients will be able to lift bigger cargoes,” he said. “Currently you can only lift 1 million barrels a day from Ruwais. From Fujairah now our clients now can bring in VLCCs and lift more.”
 

IPIC’s al-Qubaisi said his company plans to $4 billion to $5 billion to build a refinery in Fujairah with a capacity of about 250,000 barrels a day to produce for local sale and export, further enhancing the port’s importance as a hub for the processing, storage and shipment of fuels. The company said in a bond prospectus in October the refinery would produce 200,000 barrels a day at a cost of about $3.5 billion.

IPIC is working with another state-owned investment fund, Mubadala Development Co., on a project for a terminal at the port for imports of liquefied natural gas. Fujairah is already among the world’s three biggest refueling ports for commercial ships, along with Singapore and Rotterdam. Fujairah is one of the U.A.E.’s seven sheikhdoms.

The 12-member group agreed to leave the limit at 30 million barrels a day, Youcef Yousfi, Algeria’s Minister of Energy and Mines, said today in Vienna at the end of the producer group’s first meeting of the year. Venezuela, Angola and Ecuador were among nations that backed keeping the quota unchanged prior to the decision. Saudi Arabia, whose minister, Ali al-Naimi, had said this week he might favor a production increase, said he was “happy” with today’s outcome.

.OPEC has been exceeding its output limit this year as the prospect of sanctions against Iran, the group’s second-largest member, pushed Brent oil in March to the highest level since July 2008. Since then, concern that Europe’s debt crisis will erode fuel demand has driven the crude back below $100 a barrel, a level favored by Saudi Arabia, Venezuela and Libya.

“This doesn’t hide the elephant in the room, which is ultimately the upcoming full implementation of sanctions on Iranian oil,” said Harry Tchilinguirian, head of commodity- markets strategy at BNP Paribas SA in London. “These in turn imply that actual production from the cartel will continue to remain above the official ceiling.”

Brent futures for August settlement traded at $97.12 a barrel at 8:02 p.m. on the ICE Futures Europe exchange in London, down about 24 percent from this year’s high of $128.40.

Engineer Shaaban Zaak of the Presidency of the Council of Directors of the Tigris Petroleum has been transferred to the President of the Board of Directors of Ebla oil and Dr. Nabih Khrstein of the Presidency of the Council of Directors of Al-Rashid of oil to the Chairman of the Board of Directors of Dijla and oil transportation engineer Nadeem Skaff of the Presidency of the Council of Directors of Abu Kamal for oil to the Chairman of the Board of Directors of Rashid oil.

Also Dr. Riad Zarka adviser had been assigned to the oil minister for scientific cooperation, technical and scientific studies and director of technology and the environment in the oil ministry under the chairmanship of the Board of Directors of Abu Kamal oil in addition to his work knowing that he was a member of the Board of Directors of the company.

Eng. Mohamed Ruby was charged with headed by oil marketing office, succeeding geological Ghzayel Jaber, who was referred to retire on reaching the legal age

Allaw said  at a meeting held today at the building company Banias refinery to the concerned sector, production of oil and oil products that the refinery never stop production, explaining that the need for Syria daily diesel fuel more than 30 million liters are imported 16 million and the rest is produced locally, pointing to the existence of difficulties in the process of transport and distribution of material to the provinces because of armed terrorist groups that attacked the railway tanks and damage them.

The minister pointed to a project to increase storage capacity in reservoirs gas Banias, which is one of important projects to secure a sufficient stock of material gas domestic savings senior economist of the receiving vessels of large tonnage, adding that the project was carried out by a company of Dalian China at a cost of 18 million euros to increase the number of reservoirs to become energy storage material 14 thousand tons.

Alao confirmed that the material gas is available and shipping on a daily basis for all the provinces, either by tankers or trains, indicating that the gas cylinder sold to citizens at a lower price than the cost of difficulties with transportation, manufacturing and replacement.

The minister stressed the importance of conducting a study with a mechanism of tankers carrying petroleum products white Banias to different areas and find a well thought out plans for its work and ensure their protection, each according to its destination asking concerned luring offers as soon as the maximum for the pipeline project to transport gas from the plant thermal Banias to the refinery to convert the combustion in the refinery of fuel oil to natural gas, thus putting an end to the pollution.

At the conclusion of the meeting, the Minister made an inspection tour on the gas project and the mouth of the Syrian Company for Oil Transport workers and listened to the mechanism of action and how to unload cargo ship gas and diesel in the mouth.

The company also said on Thursday that chief financial officer Andrew Rose would resign from the company in April.

Gulfsands said it was "actively evaluating" new opportunities to establish a non-Syria business after European Union (EU) sanctions against the country forced the company to stop its activities there.

"The overriding objective is to build, as quickly as practicable, a viable non-Syrian leg to the business, within the capacity of the company’s present and prospective financial resources to sustain," Gulfsands said in a statement.

The company added that it had cash of $120 million and no debts, giving it confidence that it could endure a long period of uncertainty in Syria.

Gulfsands stopped being involved in production at its oil field in north east Syria, its only cash-generating asset, in December to comply with the sanctions, but until Thursday planned to carry on with its exploration activities.

"While the sanctions do not explicitly preclude further exploration, the board considers such cessation to be consistent with the intent of the sanctions," Gulfsands said.

The departure of CFO Rose, who had been in the position for three and a half years, was amicable, the company said.

Shares in Gulfsands, which have lost about half their value over the last year, closed at 173.75 pence on Wednesday, valuing the firm at 204.6 million pounds ($324.5 million).

UAE press reports in early October said Dana Gas, which already has overseas operations in Egypt and Iraq, was in advanced talks with Damascus to enter the Syrian energy sector.

But the Gulf’s only listed natural gas company says it is no longer in talks with the Syrian government, with foreign companies increasingly discouraged from doing business with Damascus because of sanctions against the Syrian government.

"Although the company has reviewed opportunities in Syria last year, it is currently not involved with any discussions with the Syrian authorities nor has signed any contracts or agreements," Dana Gas CEO Ahmed Rashid Al-Arbeed said in a statement to the UAE stock exchange on Sunday.

European and U.S. companies have shied away from dealing with Syria as their governments ratchet up sanctions against Damascus .

reuters

Benchmark oil for September delivery was down $3.48 to $77.83 a barrel, the lowest since September 2010, at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude fell $5.57, or 6.4 percent, to settle at $81.31 on Monday.

In London, Brent crude was down $4.68 at $99.06 per barrel on the ICE Futures exchange.

A downgrade of U.S. debt one notch from AAA to AA+ by Standard & Poor’s announced Friday sparked investor panic this week. Oil traders often look to equities as a barometer of overall investor confidence, and Monday the Dow Jones industrials plunged 634.76 points, or 5.6 percent, the sixth-worst point decline for the Dow in the last 112 years.

Asian stocks opened Tuesday sharply lower.

“It’s clear we’re entering, or are on the precipice of, another global financial crisis,” said Richard Soultanian, an analyst with NUS Consulting. Soultanian expects crude to fall to between $55 and $60 before rebounding to the mid-$70s in the fourth quarter.

Investors will be closely watching the latest consumption forecasts from OPEC and the Department of Energy scheduled to be released later Tuesday. Traders will also be looking to the U.S. Federal Reserve to calm markets and possibly announce another round of monetary stimulus.

The Fed has already twice implemented a program of Treasury bond purchases, known as quantitative easing, since the 2008 financial crisis.

“The way prices are falling, especially on stock exchanges, they are likely to keep falling until the Fed unveils some new program,” energy consultant Cameron Hanover said in a report. “There are very few options available, but this is threatening to be a complete meltdown.”

Some analysts argue strong crude demand from developing countries such as China should help stabilize oil prices. Most companies and consumers have less debt than two years ago, which should help lower the risk of global economic growth slowing sharply, energy analyst and trader Blue Ocean Brokerage said.

“We can all take a chill pill and understand this is not the recession of 2009,” Blue Ocean said in a report. “All of this rumbling that demand can falter from here is (nonsense). The major difference today from 2009, the world is a better place financially.”

Lower commodities prices will also lower energy and food costs, freeing up consumer purchasing power and slowing inflation. Asia is a net importer of crude, and lower oil prices should give policymakers in the region more leeway to ease recent monetary tightening.

Crude has fallen 32 percent since reaching nearly $115 in May.

Still, most traders seem to be waiting for selling to subside before jumping back in.

“We have no interest in attempting to catch a falling dagger,” energy analyst and trader The Schork Group said in a report. “The adage is to buy when there is blood on the streets, but timing the bottom has led to the demise of traders far greater than ourselves.”

In other Nymex trading in September contracts, heating oil fell 4.1 cents to $2.76 a gallon while gasoline dropped 5.1 cents at $2.64 a gallon. Natural gas futures slid 2.1 cents at $3.91 per 1,000 cubic feet.

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drilling the well aimed to explore the possibilities of hydrocarbon and balyozoak formations in the region, the first well drilled by the company and if results were positive, it will open the new prospects and the large-scale exploration activities and events in the area of the company.

Loon Energy INK Canadian Company , signed in 2008 with the Ministry of Oil and Mineral Resources, a contract to explore and develop oil and its production in the region / 9 / is called a Latakia contract and extends the area within the territory of the provinces of Latakia, Aleppo, Hama countries, and an area / 10039.139 / are still in the initial exploration period of the contract and will drill a well the second commitment (al-Bashaer – 1) before the end of this period.

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Crude oil is used to produce gasoline and other fuels, and it’s also a major investment commodity. Prices can swing with the collective mood on Wall Street. Recently benchmark oil has fluctuated between $95 and $99 a barrel as investors gauge how Europe deals with Greece’s debt crisis and the debate goes on in Washington over spending and the U.S. debt ceiling.

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Every day, we hear more about what governments are doing to get their sovereign debt under control,” independent analyst Andrew Lipow said. “But you don’t see results, and that leads some people to think we’re headed in the wrong direction.”

The dollar fell against other currencies on Tuesday, sending some investors to commodities like

oil. Oil, which is traded in dollars, tends to rise as the dollar falls and makes crude cheaper for investors holding foreign currency.

A broad stock market rally also helped push oil higher. The Dow Jones industrial average, the Nasdaq and the S&P 500 index all rose about 2 percent in afternoon trading.

Benchmark West Texas Intermediate crude for August delivery rose $1.57 to settle at $97.50 per barrel on the New York Mercantile Exchange. Brent crude, which is used to price many international oil varieties, gained $1.01 to settle at $117.06 per barrel on the ICE Futures exchange.

Some upbeat economic news supported higher oil on Tuesday as well. The Commerce Department said construction of new homes grew by 14.6 percent last month. Builders began work on a seasonally adjusted 629,000 homes in June. That’s about half of what economists say is needed to sustain a healthy housing market. Still, analysts consider it a positive sign for the battered industry.

The housing market and the unemployment rate are key factors in the nation’s economic recovery, which most view as sluggish at best right now. When more people head back to work and buy homes, oil and gas demand is expected to rise.

Gasoline pump prices rose less than a penny Tuesday to a national average $3.678 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is about 31 cents cheaper than it was when prices peaked in early May. It’s still almost 96 cents more than the same time last year.

MasterCard SpendingPulse reported that motorists continued to cut back on gasoline in the U.S. for the 17th consecutive week. Its weekly survey of credit card purchases estimates that Americans bought 1.1 percent less gas than the same period last year, based on a four-week average.

In other Nymex trading for August contracts, heating oil added 2.03 cents to settle at $3.098 per gallon, while gasoline futures gained 1.75 cents to settle at $3.1149 per gallon. Natural gas fell 1.3 cents to settle at $4.511 per 1,000 cubic feet.

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The blast occurred near the town of al-Arish in the north of the peninsula, with flames up to 10 metres high.

MENA quoted witnesses as saying that the assailants attacked the Al-Tawil security guard at the station before blowing it up.

The security guard and some members of his family were believed to have been hurt, the agency said, quoting witnesses.

MENA said the governor of Northern Sinai and the area’s security chief arrived on the scene as security forces searched for those responsible.

Fire trucks were trying to contain the flames.

The state’s Nile television said flames from the station could be seen up to 20 kilometres away.

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The area is being searched to find those behind this explosion and to find the type of explosives used,” MENA said.

The explosion has cut off gas supplies to Israel and Jordan.

MENA said the station pumps gas to another station in an area called Sheikh Zwayed, which exports gas to Israel.

Egypt has been trying to renegotiate gas prices with Israel and Jordan after president Hosni Mubarak was forced to step down in February and power was handed to the military council.

Egypt supplies about 40 per cent of Israel’s natural gas which is used to produce electricity.

Jordan buys 95 per cent of its energy needs and imports about 240 million cubic feet of Egyptian gas a day, which is 80 per cent of its electricity requirements.

In April, Egypt’s prime minister Essam Sharaf asked for the revision of all contracts to supply gas abroad, including to Israel.

Mr Sharaf said the contracts would be revisited so the gas “would be sold with deserved prices that achieve the highest returns for Egypt”.

The controversial gas deal with Israel has been repeatedly challenged in Egyptian courts due to its secretive clauses and over prices, and because it was sealed without parliamentary consultation.

In May, Jordan said Egypt was withholding its contracted gas supply unless a new deal was signed at a higher price.

A security source had said after a blast on July 4 that men in a small truck who were armed with machine guns forced guards at the station to flee, then planted explosive charges.

Egypt’s gas transport company, Gasco, a subsidiary of the national gas company EGAS, has been finalising repairs on the pipeline and was expected to complete the work over the weekend.

Previous attacks on the pipeline on April 27 and on February 5 forced its closure for several weeks.