Aramco begins East-West Pipeline expansion to 10 million bpd

Saudi Aramco has begun work to expand its East-West Pipeline capacity to 10 million barrels per day from 7 million, chief executive Amin Nasser said Tuesday. The expansion and construction of additional networks are already underway, Nasser told analysts on a third-quarter results call. He added that the company is conducting engineering work on existing export routes but will withhold details until final investment decisions are made.

Expansion work already started#

Nasser confirmed that work on the East-West Pipeline expansion and additional networks has commenced. The pipeline currently carries crude from Saudi Arabia's eastern fields to Yanbu on the Red Sea. Aramco is also reviewing engineering options for export routes via the Strait of Hormuz and the Suez Canal, though no final investment decisions have been announced. The company has not disclosed a completion date for the expansion.

Regional producers building Asian storage#

Aramco holds 13.5 million barrels in Japan and South Korea and last week agreed to pursue storage at Singapore's Jurong Rock Caverns starting in the second half of 2027. Adnoc is planning to increase its Indian storage to a maximum of 30 million barrels, up from the roughly 11 million barrels currently under lease there. Host governments receive priority purchasing rights for the oil stored at Aramco's Okinawa and Ulsan facilities during supply shortages. Leasing existing storage facilities overseas could cost USD 7 to 10 per barrel annually, according to Dalga Khatinoglu, editor-in-chief of Caspian Energy Intelligence.

Iraq exploring Red Sea pipeline route#

Saudi Arabia has approved preliminary plans for a pipeline project connecting Iraqi crude to its oil terminals on the Red Sea, Iraqi news daily Shafaq reported, citing sources familiar with the matter. The project is in early stages and the two countries still need to form a bilateral technical committee to review it. Iraqi crude flowed to Saudi Red Sea terminals in the late 1980s through a pipeline built during the Iran-Iraq war. The pipeline, which cost USD 2.3 billion and had a capacity of 1.6 million barrels per day, was shut down after Iraq invaded Kuwait in 1990. Iraq's crude exports dropped to as little as 200,000 barrels per day in May before recovering to 3.4 million barrels per day by mid-October.

UAE bypass capacity set to double#

Adnoc's Habshan-Fujairah pipeline can carry around 1.8 million barrels per day to the UAE's east coast. A second line due to begin operations in early 2027 is expected to double the bypass capacity. Adnoc CEO Sultan Al Jaber said at the ADIPEC energy conference in Abu Dhabi that the world needs bigger strategic oil reserves, more refining capacity closer to consumers, and new transport routes. Nearly 1 billion barrels have come out of global oil inventories over eight months, and diesel stocks in some markets are at their lowest seasonal levels in 35 years, Al Jaber said Monday. Shipping and logistics now make up more than 30 percent of the cost of a barrel, up from less than 5 percent before disruptions began.