Positioned near the Strait of Hormuz, Fujairah's harbour is growing in importance, with a key oil pipeline soon to be completed. Marine traffic there already reflects its exciting progress, Sean Cronin writes in the first of a two-part series
At the Seamen's Club in the Port of Fujairah, every night is the weekend. Sailors with cabin fever make up much of the crowd. But for the public this is strictly off-limits.
At 8pm on a Tuesday, the bar is hopping. Two Filipino women are belting out the lyrics "I will go down with this ship" from Dido's White Flag. It is a largely captive audience, explains an American sailor eating dinner at the bar. He works on a US navy support vessel tied up at a nearby berth, and the Seamen's Club is the closest the crew gets to shore leave.
"Some of the guys got into fights and now they don't let us out," he says.
His fellow crew members are playing pool on a stained table tacky from spilled drinks. At the back of the bar, rows of slot machines provide another distraction while a few men wait to use a bank of ageing computers to send emails.
The growing strategic importance of Fujairah as a crude oil hub as well as an oil storage and ship refuelling bunker is drawing increasing numbers of seafarers from around the globe. Its vast anchorage is visited by tankers, cargo ships, cruise liners and even submarines.
More will come when a delayed pipeline from Abu Dhabi's onshore field at Habshan is completed, allowing crude exports to bypass the choke point of the Strait of Hormuz.
The 48-inch pipe travelling more than 370 kilometres overland has existed as a concept for decades but is only now becoming a reality after years of deteriorating relations between Iran and the West over Iran's nuclear ambitions.
The pipeline could become operational as early as this year, carrying 1.5 million barrels of crude a day across the mountains to eight tanks capable of holding 1 million barrels each. From there the oil can be piped to tankers in the harbour.
The pipeline represents an artery that is giving one of the UAE's poorer emirates, traditionally reliant on subsidies, a transfusion of investment. The impact is already trickling down through the economy, says Vince Cook, the chief executive of National Bank of Fujairah, which is opening its first retail outlet in a giant shopping mall that welcomed its first customers last week.
"We have started to see good levels of growth and the assets in our business attributed to Fujairah have doubled in the last two years," he says.
On the thin strip of land that separates the sea from the mountains behind the port, scores of giant steel tanks are sprouting. They are owned by companies that include Emirates National Oil Company, Emirates Petroleum Products Company and Vopak Horizon. They will triple in number by 2015, when more than 360 of them are expected to be in use, holding some 13.3 million cubic metres of oil products.
The development of a crude oil and petroleum products hub could also pave the way for the emergence of Fujairah as a pricing centre for crude, says Salem Khalil, an adviser to the Fujairah Government.
"Refiners or trading companies who currently have no reason to use Fujairah beyond petroleum products may consider the port a good staging point for their crude business once the crude hub is established," he says.
Alongside the oil storage containers dotted along the road, a 200,000 barrel-a-day refinery is planned. Further along the coast a floating import terminal for liquefied natural gas will mean that gas imports to the country will also be able to avoid the strait. Strategic investments in Fujairah extend beyond energy. Invest AD, an Abu Dhabi investment fund, is building a series of giant grain silos aimed at improving the country's food security while also providing the raw material for a fledgling food processing industry.
The expansion of the port and its hinterland is reviving the economic prospects for the eastern emirate. Hotels and shopping centres are springing up in a part of the country largely untouched by the rampant development of the west coast. The navy presence is also palpable.
Behind the bar at the Seamen's Club, stickers of US navy ships and submarines decorate the wall.
Some carry their full names, while others just display insignias with abbreviations starting with the letters SSN - US navy shorthand for attack submarines.
"USS Jefferson - When any exigence calls" reads one. Another says: "Explosive Ordnance Disposal Operational Support Unit Ten".
There are also British sailors here, from The Diligence, a British Royal Fleet Auxiliary ship that served in the South Atlantic in the 1982 Falklands war and 30 years on is plying the waters of the Gulf.
The ship has specially designed bow thrusters capable of keeping it in a fixed position in a force-nine gale. They are unlikely to get much use in the oily still waters of Fujairah Port, where blooms of jellyfish can be seen drifting beneath the surface and scores of oil tankers sit motionless. The typically calm waters make ship refuelling easier than in other choppier harbours, helping Fujairah become one of the world's biggest bunkering ports.
Naval ships and their support vessels are frequent visitors to the port but do not appear on the official shipping list that is posted on its website and which largely comprises bulk carriers, oil tankers and the occasional cruise ship.
With the political stand-off over Iran's nuclear programme constantly in the headlines, the presence of British and American warships and submarines in Gulf ports is of keen interest.
Captain Mousa Murad, the general manager at the Port of Fujairah, stresses that there has been no increase in the number of visits by foreign naval ships to the port.
"All the navies come for services here," he says. "It is not just the US. It continues every year."
The rising tension has sent the price of Brent crude up about 14 per cent since the beginning of the year as sanctions against Iran are increased.
Yet regional conflict and political upheaval have tended to benefit Fujairah in the past. Capt Murad first came to work at the port three decades ago, when it was a small dot on the maritime map used mainly for the regional trans-shipment of cargo. Official operations did not start until 1983, when the Iran-Iraq war started to divert shipping towards Fujairah. That presented an opportunity for the port, recalls Capt Murad.
"In 1982 during the war we found more than 200 ships came to Fujairah. So we said let's organise the anchorage area so we will benefit and the companies will benefit," he said.
From these beginnings, Fujairah grew to become one of the world's biggest bunkering centres, rivalling Rotterdam and Singapore. Two decades later, the bombing of the USS Cole on October 12, 2000, in the Yemeni port of Aden resulted in more sea traffic being diverted to the emirate.
Fujairah had its own brush with terrorism on July 28, 2010, when a Japanese tanker was damaged by an explosion in international waters about 12 nautical miles from the port. Explosives experts found a dent in the starboard side of the ship above the water line, probably caused by a boat carrying explosives. While the incident caused a scare, it was soon forgotten in an industry under daily threat of attack from Somali pirates.
Since ships first started to moor in Fujairah anchorage back in the days of the Iran-Iraq war, the growth of the port has been largely driven by demand - reacting to the requirements of the supertankers in the harbour as well as the needs of the sailors in the Seamen's Club.
But when the new pipeline starts carrying crude through the mountains and the vast grain silos on the quayside begin to fill with cereal, the emirate's accelerating trajectory will change from the opportunistic to the strategic.
As the signs on the coast road greeting visitors proclaim: "Fujairah is growing".
twitter: Follow our breaking business news and retweet to your followers. Follow us
