A pipeline the UAE is building to pump oil from east coast terminals and bypass the Strait of Hormuz will be fully operational in August, an Abu Dhabi oil official said yesterday.

The Habshan-Fujairah pipeline, which will carry oil from fields in Abu Dhabi on the Gulf to Fujairah on the Gulf of Oman, is "approaching the phase of continuous operation", said Abu Dhabi Marine Operating Company chief executive Ali Jarwan.

"We expect that by August we'll have regular flow of oil," Jarwan said at the Abu Dhabi International Petroleum Exhibition and Conference.

In late May, Fujairah ruler Shaikh Hamad bin Mohammed Al Sharqi said the pipeline would start operating in June.

Construction of the 360km pipeline began in 2008.

According to Shsikh Hamad, the pipeline will have an initial capacity of 1.5 million bpd rising to 1.8m bpd, which represents the bulk of the UAE's current production of around 2.5m bpd.

Fears of a closure of the Strait of Hormuz intensified earlier this year after Iran threatened to close the strategic outlet from the Gulf if Western governments kept up their efforts to choke off its oil exports in a bid to rein in its controversial nuclear programme.

Reports said Iranian MPs endorsed a bill banning Europe-bound tankers from using the Strait of Hormuz to punish EU nations that slapped sanctions on Iran.

In addition to the exports of the UAE and Iran itself, all the oil exports of Bahrain, Kuwait and Qatar are shipped through the waterway. Iraq also pumps the bulk of its exports through ports on the Gulf.

Saudi Arabia pumps most of its crude from its terminals on the Gulf but it can divert large supplies to terminals on the Red Sea.