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94 australian maritime issues 2009: spc-a annual
Mitigating the Shock
A worst-case scenario is qualified by the potential of alternative means of transporting
energy from the Gulf, plus the production of alternative energies. Saudi Arabia has
two pipelines that can transport crude from the Gulf coast to the Red Sea, though
they are expensive to maintain and operate. The Petroline has the capacity to carry
5 million b/d to the port of Yanbu off the Red Sea, used to supply European markets.
The Abqaiq-Yanbu natural gas liquids line runs alongside the Petroline and as of 2008
had a capacity of 555,000b/d. 73
In the UAE, contractors China Petroleum Engineering and Construction Corp are
currently constructing a $3.29 billion, 400km long oil pipeline leading to the port
of Fujairah on the east coast. The Oil Terminal 2 pipeline will transport oil from the
onshore Habshan field in the emirate of Abu Dhabi, which pumps roughly 95 per cent
of the crude oil in the UAE. Officials expect the pipeline to be operational by the end of
2010, meaning that the UAE could divert up to 78 per cent of its crude oil exports away
from the Persian Gulf route. The pipeline will redirect up to 1.8 million b/d away from
the Strait of Hormuz, and will save tankers up to 24 hours of sailing time compared
to the existing port in the Persian Gulf. 74
However it should be noted that oil pipeline capacity continues to be limited, and falls
drastically short of the 17 million b/d target. Similarly, liquefied natural gas (LNG)
pipelines for exporting gas outside the Gulf simply cannot match the level of seaborne
LNG traffic. Qatar is the world’s leading LNG exporter, exporting close to 911,000b/d
(mostly to Japan, South Korea, India and Spain), totalling nearly 2325 million barrels
(1.4 trillion cf) in 2008. 75 Even at maximum capacity, the Abqaiq-Yanbu gas pipeline
could only transport half of Qatar’s daily LNG exports. Nonetheless, if the need arises
the GCC states are likely to use the pipelines to full capacity, and due to the perceived
threat from Iran, will continue to develop existing pipelines. 76
PART TWO
The Gulf Cooperation Council
I and my brother against my cousin, and I and my cousin against
the stranger.
Arab Proverb 77
The above proverb aptly describes the real relationships between the members of the
GCC. Although they are likely to overlook their differences in the face of a genuine
threat from a non-Gulf power, in less ominous times the members treat each other
with varying degrees of suspicion, and nearly all notable achievements are bilateral
rather than collective agreements. Border disputes have particularly undermined the