TotalEnergies Backs Two Major Oil Pipelines to Bypass Hormuz

TotalEnergies, the multinational energy company, has pledged its support to two significant oil pipelines aimed at circumventing the Strait of Hormuz. The announcement was made by the CEO, Patrick Pouyanné, at the ONS energy conference in Norway, following a two-month hiatus where investment in alternative Gulf export routes became a "priority" for TotalEnergies due to Hormuz's disruption during the Iran war.

The company has not revealed the exact investment amount or the stake it will acquire in either project. However, Pouyanné confirmed that they will become partners of the pipeline that transports crude from Baghdad to Syria, and also plan to invest in doubling the capacity of Abu Dhabi's existing Habshan-Fujairah pipeline. The current Habshan-Fujairah pipeline can transport up to 1.8 million barrels of oil per day from Abu Dhabi's oil fields to the Gulf of Oman, effectively bypassing Hormuz and reaching international markets.

The UAE's Habshan-Fujairah pipeline is capable of handling up to 1.8 million barrels of oil per day, which will allow this quantity to reach global markets without having to pass through Hormuz. As the Iran war has highlighted the limitations of the existing system, Abu Dhabi is planning to nearly double the bypass capacity of the Habshan-Fujairah pipeline by the end of next year.

TotalEnergies is making a parallel investment in Iraq, proposing an Iraq-Syria pipeline that would provide Baghdad with a Mediterranean export route for crude. Currently, most of Iraq's crude is transported through Persian Gulf terminals. The proposed project is estimated to cost around $15 billion and may take at least four years to complete.

Pouyanné stated at the conference that TotalEnergies is now likely the largest trader of oil from Iraq or Qatar, and it is clear that the company needs to invest in alternative routes. The disruption of tanker traffic in the Gulf, caused by the war, has accelerated the development of these projects.