Geography can shape a country in more ways than one. A fine case in point is this week's announcement that Mubadala Development will fund construction of a liquefied natural gas terminal in Fujairah. This is an extension of Fujairah's emirate-level development plan, but it is driven by the national energy-security strategy.
As a regional hub for trade and commerce, Fujairah's importance is well-established. Traders from China and India plied the ports more than 2,000 years ago, and the 9th-century scholar Abu Jafar Muhammad Ibn Habib called Dibba "one of the two ports of the Arabs".
While the emirate's port is today the biggest refuelling terminal in the Middle East, its economic ties to the rest of the country have been hampered by poor land transport links and underdeveloped infrastructure. That is changing, most noticeably with the recently completed Dubai-Fujairah motorway.
But the wider picture is energy security and exports. In regards to LNG in particular, the Fujairah terminal opens another option in addition to the Dolphin pipeline link to Qatar. Most of the country's electricity is generated by plants that burn natural gas, making guaranteed supplies vital for growth. Once operational, the new terminal will become another option for self-reliance.
Because entry to its port does not require passage through the Strait of Hormuz, Fujairah has an inherent strategic advantage over other regional ports. In a crisis that affected traffic in the Strait, conceivably born out of the much-trumpeted US-Israel-Iran hostilities, Fujairah would be a critical point of export and import. The 1980s Iran-Iraq war, and its spillover into the Gulf, was a dramatic example why the UAE needs strategic options on energy shipments.
There are new challenges as well. For example, shipping routes that are now being threatened by piracy could be further constricted as traffic increases. In February, a container vessel came under attack just off Fujairah's coast.
But the economic and strategic benefits are a powerful argument for this new gas terminal. Along with the planned west-east oil pipeline, the projects are solidifying Fujairah's place in the nation's long-term energy security plans. These are winning projects for the emirate, and for the nation.
