Expansion plans putting Abu Dhabi's port facilities in a good position

The emirate is home to nine non-oil ports, all of which are managed by Abu Dhabi Ports, though the container terminal within Khalifa Port is operated under a 30-year concession signed in 2012 by Abu Dhabi Terminals (ADT), a joint venture between Abu Dhabi Ports, Abu Dhabi-based investment and development company Mubadala Development Company, and Mubadala Infrastructure Partners. The main commercial ports are Zayed Port (which includes the Free Port), Musaffah Port and Khalifa Port.

Zayed Port, located adjacent to Abu Dhabi City’s centre, was formerly the emirate’s principal maritime facility; however, this changed following the December 2012 official opening of Khalifa Port, which is 60 km to the west of the city on a 2.7-sq-km reclaimed island, making it the emirate’s largest port. Roll-on/ roll-off (ro-ro) operations also moved from Zayed Port to Khalifa Port in April 2015. Khalifa Port has capacity for 350,000 vehicle units a year. Khalifa Port can also handle four large ro-ro vessels at a time.

New Port

The total number of vessel turnarounds at Khalifa Port, which has shipping lines to over 50 direct destinations, stood at 1050 in 2014, according to transport data from Statistics Centre - Abu Dhabi (SCAD). The port’s container terminal currently has a capacity of some 2.5m twenty-foot equivalent units (TEUs) a year, while its general cargo handling capacity stands at about 12m tonnes per annum, according to Abu Dhabi Ports. The container facility is the first semi-automated container terminal in the Middle East region, and Martijn Van de Linde, CEO of ADT, told OBG they are pursuing further automation for both administrative processes and equipment, which is a key element of the firm’s development strategy. In September 2015 Container Management magazine ranked Khalifa Port the third-fastest-growing container port worldwide and first in the region. The integrated trade hub of Abu Dhabi, the Khalifa Industrial Zone Abu Dhabi, is located adjacent to Khalifa Port.

Changing Role

While Zayed Port no longer handles container and ro-ro operations, it continues to handle general, bulk and project cargo and has even witnessed growth in some types of traffic. Vessel turnaround at the facility fell from 1886 in 2013 to 1023 in 2014, according to SCAD. The port continues to invest in operations, and in May 2015 it acquired two new mobile harbour cranes as part of broader efforts to upgrade cargo-handling equipment at the emirate’s major commercial ports, in addition to the implementation of the new Jade software’s terminal operating system called Master Terminal, which is set to increase productivity by 15-20%.

Cruise ships began calling at Zayed Port in 2006, and traffic is on the rise. Some 111 cruise ships – up from 94 the previous year – are scheduled to call at the port during the 2015/16 cruise season, which runs from September to April, bringing 205,000 passengers through its cruise terminal. Abu Dhabi Ports estimates that passenger traffic at Zayed Port will reach 300,000 by the 2019/20 cruise season. The new Abu Dhabi Cruise Terminal has also been constructed at Zayed Port and officially opened in December 2015, according to a report from the Emirates News Agency. Mohamed Juma Al Shamisi, CEO of Abu Dhabi Ports, told the agency, “We have achieved a major milestone by completing this ambitious cruise terminal project within one year. This will serve Abu Dhabi’s rapidly growing cruise industry.”

The emirate’s third major commercial terminal, Musaffah Port, is located adjacent to the industrial zone of the same name close to Abu Dhabi city. The port has nearly 40 km of waterfront and is made up mostly of private terminals, including an iron ore terminal operated by Emirates Steel, as well as hydrocarbons-focused operations. Abu Dhabi Ports also operates a general cargo terminal at the facility.

Cargo Traffic

The total movement of general and bulk cargo by sea in and out of Abu Dhabi stood at 12.8m tonnes in 2014, representing an increase of 36.8% on 2013 figures, according to SCAD. Goods unloaded (as opposed to loaded) accounted for 93% of the total. Growth continued in 2015, with general and bulk cargo increasing in volume to 15.3m tonnes, a rise of 20% on the same period the previous year. Traffic reached record levels in July and August of 2015 with a combined total of 2.86m tonnes.

Vehicle imports through Abu Dhabi’s ports rose from 106,071 in 2014 to 134,272 in 2015, an increase of 27%. Meanwhile, total container traffic in and out of the emirate rose 32%, up from 1.1m TEUs in 2014 to 1.5m TEUs in 2015. All container traffic movement in 2015 took place at Khalifa Port Container Terminal (KPCT). A total of 390,786 TEUs of incoming containers originated from other ports in the UAE, while 261,358 TEUs were bound for other ports in the country. East Asia accounted for the largest share of containers bound for ports abroad at 135,592 TEUs.

Van de Linde attributed a substantial part of this increase to the growth in the Abu Dhabi industry, as well as a substantial rise in regional trans-shipment and shipping lines calling at KPCT. Another portion of the growth was driven by Abu Dhabi-based petrochemicals company Borouge, which is amongst ADT’s largest clients, and the launch of the Borouge 2 and Borouge 3 expansion projects in particular. The producer is likely to continue to drive growth at the plant, with the Borouge 3 expansion yet to hit full capacity and plans in the pipeline to expand the Borouge 4 plant. Speaking in October 2015, Van de Linde told OBG that the firm expected total container traffic of around 1.6m TEUs in 2016, which he said would trigger discussions about expanding the terminal if achieved. The next phase of expansion is due to double annual capacity to 5m TEUs.

Regional Competition

The container terminal faces competition from other ports in the region, most notably Jebel Ali deepwater port in Dubai, which is the region’s major trans-shipment hub. Furthermore, regional port capacity is growing, with Jebel Ali continuing to expand and other new port projects such as the Duqm port and freezone in Oman in the pipeline. However, Van de Linde said this was not a major concern. “There is lots of capacity coming on-stream in the Gulf region, including Jebel Ali’s Terminal 4 project, and there is some danger of over-capacity in the short term. However, ports are a long-term investment and there is no risk over over-capacity in Abu Dhabi specifically,” he told OBG.

Furthermore, the July 2015 deal between Iran and the international community over the former’s nuclear programme has been widely expected to boost trade in the region and increase traffic.

Boosting Efficiency

Abu Dhabi Ports is working on a number of initiatives aimed at further improving efficiency and management in Abu Dhabi’s maritime facilities. In December 2014 Abu Dhabi Ports announced that it had begun work on a new port community system, known as Maqta Gateway, which it described as an “innovative port community system project” that will act as a single window to facilitate information flow between all port stakeholders and parties. Among other changes, this system will move most port administration processes from a paper-based to an electronic system, as well as provide the authorities with detailed information to aid in analysis and decision-making.

The first stage of the system focuses on vessel management and container terminal operations, as well as integration of the Abu Dhabi Customs and ADT’s systems, and is expected to enter operation by early 2016. Other elements will be rolled out in six more stages over the coming years. In July 2015 Abu Dhabi Ports announced it began to roll out Jade Software’s “Master Terminal” operating system across its facilities, starting with Khalifa Port and Zayed Port, which it says will provide ports with more accurate pre-arrival information regarding vessels’ cargo.