The world's biggest oil companies are setting their sights on crude storage in Fujairah to maintain swift access to Asian markets.
Saudi Aramco, the world's top oil producer, has leased 1 million barrels of petrol storage at the Vopak Horizon terminal, a joint venture between Dubai's Emirates National Oil Company and Vopak of the Netherlands.
Royal Dutch Shell is also in negotiations to lease 1 million barrels of crude storage, reported Bloomberg. If a deal were made, Shell would become the first foreign company to lease crude storage in the Arabian Gulf region since the industry was transformed by nationalisation in the 1970s.
"We keep on receiving requests for new projects," said Salem Khalil, a technical adviser to the Government of Fujairah. "Our indication from consumers interests' is that the demand is there and, to the best of the my knowledge, the utilisation of the existing projects - VTTI, Gulf Petrochem, Socar Aurora - is very busy."
Shell did not confirm the negotiations.
Fujairah, once a sleepy emirate with fishing and a weekly bullfight as its main attractions, has wrought an economic transformation in recent years thanks in part to a new oil route.
The Habshan-Fujairah pipeline, completed last year, allows crude from Abu Dhabi's onshore fields to bypass the Strait of Hormuz, the narrow waterway that Iran has repeatedly threatened to close to cut off a fifth of global oil supply from consumers.
Along with the pipeline have come millions of cubic metres of oil products storage, expansions in power generation and plans to build a liquefied natural gas import terminal and to enlarge the port to accommodate the largest class of crude tankers.
The developments are made possible through infrastructure that will float out at sea, like the gas terminal, or by expanding the emirate's limited space by reclaiming land, using material from its mountains.
Total oil products storage capacity is set to double by 2015, to 8,900 million cubic metres from 4.53 million cubic metres today. Major traders such as Trafigura, Total's trading arm and PetroChina are among the companies that have leased space for oil products, allowing them to dispatch Gulf products quickly to Asian consumers.
Fujairah is already among the world's top three bunkering hubs with Singapore and Rotterdam.
"At the moment there is a shortage," said Mr Khalil of the emirate's storage capacity.