Bulk Carrier ‘Adventure’ at the Port of Fujairah (Photo: Reuters).
The drive gained momentum since L’imad announced plans to take Abu Dhabi Ports Co. private at a valuation of almost $9 billion, Bloomberg reported citing people familiar with the matter. Abu Dhabi’s state-owned wealth platform, L’imad Holding, is preparing to increase its investment in ports and other infrastructure beyond the Strait of Hormuz, as the UAE seeks to lessen its dependence on the waterway during the ongoing conflict with Iran. The Strait of Hormuz is the main sea exit from the Persian Gulf. Iran’s capacity to interrupt traffic through it has become a growing worry for Gulf governments since the war began in February.
Bloomberg reported that in March, debris from an intercepted drone started a fire at the oil-trading hub.
The fund is now likely to commit tens of billions of dollars more to port infrastructure outside the strait, according to the sources. The effort is part of a wider strategy that Abu Dhabi officials have called “Zero Hormuz”. People familiar with the matter told Bloomberg that Sheikh Khaled and senior Abu Dhabi officials are focusing in particular on expanding infrastructure in Fujairah, a UAE port city on the Gulf of Oman, outside the strait.
It aims to establish alternative routes for the emirate’s oil, petrochemicals, aluminium and other commodities should shipping through the strait be disrupted. Fujairah already acts as an alternative outlet for some UAE crude exports and has become central to Abu Dhabi’s attempts to develop routes that avoid Hormuz. However, creating alternatives does not eliminate the security threats facing Gulf infrastructure. Fujairah itself was affected during the conflict. Saudi Arabia has encountered similar difficulties in reducing its reliance on Hormuz. Crown Prince Mohammed bin Salman has expanded the kingdom’s East-West pipeline to carry oil to the Red Sea, but the route was briefly shut down following attacks by pro-Iran militias before operations later resumed. You use AI every day. Now get your AI Quotient. Take the AIQ test.
The investment push is being led by Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed Al Nahyan, who became chairman of L’imad a few weeks before the conflict started.