Abu Dhabi’s ADNOC Logistics & Services (ADNOC L&S) has awarded $1.9bn (Dhs7bn) worth of shipbuilding contracts to build 13 new very large ethane and ammonia carriers, with delivery scheduled between 2025 and 2028.
AW Shipping, ADNOC L&S’s joint venture with Wanhua Chemical Group, awarded shipbuilding contracts to Jiangnan Shipyard in China.
The contract for the construction of nine Very Large Ethane Carriers (VLECs) is valued at $1.4bn, while the contract for two Very Large Ammonia Carriers (VLACs) is approximately $250m, with an option for two additional VLACs at the same price, ADNOC L&S said in a bourse filing.
The energy logistics firm said the VLECs will be deployed on 20-year charter contracts, generating revenue of $4bn through 180 years of aggregated contract coverage. With over 25 VLECs in operation worldwide, the addition of nine new vessels will position AW Shipping as one of the largest VLEC fleet owners globally.
“The new order by AW Shipping reinforces ADNOC L&S’ ongoing fleet expansion and will bolster our ability to transport lower-carbon energy sources and support the energy transition,” said Abdulkareem Al Masabi, chairman of AW Shipping and CEO of ADNOC L&S.
Each VLEC has a carrying capacity of 99,000 cubic meters and can be powered by ethane or conventional fuels, while each VLAC has a carrying capacity of 93,000 cubic meters for ammonia and can be powered by liquefied petroleum gas or conventional fuels.
Meanwhile, ADNOC L&S awarded $2.5bn worth of shipbuilding contracts earlier in July to build new liquefied natural gas (LNG) tankers as part of the company’s growth and fleet expansion strategy.
The fleet expansion is expected to support the growing export volumes of natural gas, which is an in-demand critical lower-carbon transitional fuel.
ADNOC L&S revised its growth guidance upwards in Q1 2024. It plans to invest more than $5bn in energy-related maritime logistics over the medium term to meet growing demand in the UAE and beyond.
The company delivers crude oil, refined products, dry bulk and liquefied natural gas from Abu Dhabi to its international customers. It was created in 2016 following a merger between Abu Dhabi National Tanker Company, Petroleum Services Company and Abu Dhabi Petroleum Ports Operating Company.
Its net profit in the January-March period jumped 34 per cent year-on-year to reach $194m, while its revenue increased by 42 per cent to $840m. ADNOC L&S’s $769m IPO in 2023 was oversubscribed 163 times.
Source: Gulf Business
