SK Engineering and Construction (SKEC) has bagged an engineering, procurement and construction (EPC) contract worth AED4.4bn ($1.21bn) from the Abu Dhabi National Oil Company (ADNOC) for the latter’s underground oil storage project in the UAE.
The underground oil storage project, called ADNOC Fujairah Underground Storage, will come up in the Emirate of Fujairah on the eastern coast of the country. It will have a capacity of 42 million barrels of crude oil.
Under the contract, SKEC will construct the three underground storage caverns that make up the underground oil storage project. Each of the caverns will have a storage capacity of 14 million barrels, deep below ground level, revealed ADNOC.
The Abu Dhabi-based oil and gas giant revealed that it started works on the project in 2018 and has completed its first phase, which involved the construction of an access tunnel.
SKEC CEO Jae Hyun Ahn said: “We are progressing well in our project with ADNOC in the construction of the world’s largest single storage facility in hard rock, located in Fujairah. SKEC are committed to providing high quality services, as well as supporting the local UAE economy, as we grow our expertise in global energy storage.”
Targeted to be completed in 2022, the Fujairah underground oil storage project will be able to provide storage for three different types of crude oil, thereby giving ADNOC an increased flexibility to export crude via the emirate’s Arabian Sea oil terminal.
According to the company, the ADNOC Fujairah Underground Storage will also consolidate the position of UAE position as a crude oil supplier.
ADNOC Group CEO 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.”