DP World to Build Two UAE Container Terminals Outside of Hormuz

DP World said it reached a deal to develop two new deepwater terminals that will connect the world’s largest container port outside of Asia to global trade routes without vessels needing to transit the Strait of Hormuz.

The Dubai-based port and logistics giant on July 22 announced an agreement in principle with Fujairah Ports Authority for a 50-year concession on the United Arab Emirates’ eastern coast on the Gulf of Oman. The new facilities will add to the UAE’s plans to build oil pipelines and expand other ports as it looks to reduce its dependence on Hormuz, whose blockage during the Iran war has thrown Middle East economies into turmoil.

The latest facilities, the Al Rugaylat container and multi-purpose terminal, and the Dibba general cargo terminal, will have a combined annual capacity of 2.5 million 20-foot containers, 190,000 autos and as much as 5.3 million tons of general cargo, the company said in a statement.

The U.S.-Iran war has turned the Hormuz strait into a chokepoint that’s constricted container volumes through Jebel Ali, DP World’s flagship port on the Persian Gulf coast. Some companies and governments have turned to trucking and rail to keep key goods moving, but the capacity of these operations are limited.

The new terminals will be linked to Jebel Ali, and integrated with a nearby east coast zone called Jafza through an inland logistics network, DP World said. The development will occur in phases, and take as long as 30 months.

“The UAE has been at the heart of DP World’s story for more than four decades, and this investment reflects our confidence in its future as one of the world’s leading trade and logistics hubs,” Chairman Essa Kazim said in the statement. “Building on the strength of Jebel Ali, this development deepens our commitment to the UAE and reinforces the country’s strategic role in global trade.”