Al Gharbia Pipe Company expects new demand as Middle East nations bypass Hormuz

Abu Dhabi's Al Gharbia Pipe Company anticipates a substantial increase in demand for its products as Middle Eastern nations accelerate projects to construct pipelines that circumvent the Strait of Hormuz, which remains effectively blocked due to ongoing hostilities. Speaking to The National, Noritsugu Mifune, Al Gharbia's acting CEO and a joint venture between Abu Dhabi's Senaat, Japan's JFE Steel, and Marubeni-Itochu Steel, stated that "every country in the region is considering a new pipeline to avoid Hormuz. We expect more demand in the future."

Gulf countries and Iraq have outlined plans to build pipelines to transport crude oil to global markets as shipping through the strait remains obstructed. The UAE is enhancing the 360km Habshan–Fujairah pipeline, also known as the West–East crude oil pipeline, aiming to double its export capacity from the current 1.5 million barrels per day.

Concurrently, Iraq and Syria are collaborating to restore a pipeline damaged during the 2003 US-led invasion. Saudi Arabia, the world's largest oil producer, is also exploring expansion of its East-West pipeline to assure its capacity to supply global markets without navigating the Strait of Hormuz.

US Treasury Secretary Scott Bessent recently projected that "the strait will be a worthless piece of water" within two years once new pipelines allow Gulf countries to bypass it. He anticipates that up to 70% of the energy typically passing through the waterway would be redirected via pipelines. Al Gharbia has previously supplied pipes for Adnoc's West–East crude pipeline project and Iraq's Majnoon oilfield near Basra.

The company is currently engaged in discussions with Adnoc regarding potential future pipeline projects, according to Mifune.

The company is also exploring the manufacture of pipes for transporting hydrogen gas, as nations intensify efforts to expand low-carbon fuel production to reduce emissions. Al Gharbia's pipe production stood at approximately 250,000 tonnes last year, but dropped to around 60,000 tonnes this year because of supply chain disruptions and delays to oil and gas projects across the region due to the war. The company projects a rise to 200,000 tonnes next year in anticipation of heightened demand.

Al Gharbia imports the steel plates required to fabricate its pipes from Europe, China, South Korea, and Japan. The Fujairah port plays a pivotal role in shipping these materials due to the closure of the Strait of Hormuz. On Wednesday, a vessel carrying steel for the company successfully navigated the Strait of Hormuz for the first time since the conflict commenced, as reported by Al Gharbia's chief commercial officer, Junya Kako, during a media briefing in Abu Dhabi.