Abu Dhabi's IPIC has awarded Australia's WorleyParsons an engineering and design contract for an oil pipeline to bypass the Strait of Hormuz, a report said.

Over 13 million barrels per day of crude, over 15 percent of global supply, flows from Gulf producers through the strategic shipping chokepoint, according to the International Energy Agency.

Analysts fear Iran may try to disrupt shipping through the Strait if Western powers resort to military action in the row over Tehran's nuclear programme.

The International Petroleum Investment Company (IPIC), invests in oil and gas projects for the Abu Dhabi government. IPIC plans for the pipeline to be ready for use by 2009, state news agency Wam added.

The 1.5 million barrel per day (bpd) pipeline would allow the world's sixth largest exporter to pump more than half of its exports to the port of Fujairah on the Gulf of Oman and outside the Strait.

Fujairah is a major ship bunkering hub for vessels refuelling as they enter and leave the Strait.

The pipeline would save Abu Dhabi money on shipping costs.

The 320 km pipeline would link state oil firm Abu Dhabi National Oil Company's Habshan fields to Fujairah. The project also includes oil storage and terminal facilities for crude exports at Fujairah.

German-based ILF Consulting Engineers is managing the project.Reuters