ADNOC Logistics and Services (ADNOC L&S), a global energy maritime logistics company, announced that it has awarded South Korean shipyards Samsung Heavy Industries and Hanwha Ocean up to AED9.2 billion ($2.5 billion) in shipbuilding contracts for the construction of eight new liquified natural gas (LNG) carriers as part of the company’s transformational growth strategy and fleet expansion plans.
Fleet expansion
The company expects to receive the carriers by 2028 and will time charter them to ADNOC Group subsidiaries for a period of 20 years. Hence, ADNOC L&S aims to support the growing export volumes of natural gas as an in-demand critical lower-carbon transitional fuel. The new vessels will increase the company’s fleet of LNG carriers from 14 to at least 22 vessels.
“The shipbuilding contracts with Samsung Heavy Industries and Hanwha Ocean are major steps forward in our transformational growth strategy, demonstrating ADNOC L&S’ steadfast commitment to value-accretive strategic investments. We have now committed to over 50 percent of our medium-term strategic investment target one year post our record-breaking IPO in 2023,” stated Captain Abdulkareem Al Masabi, CEO of ADNOC L&S.
ADNOC L&S’s growth strategy
At the time of its public listing last year, ADNOC L&S highlighted its transformational growth strategy, targeting investments of $4-5 billion over the medium term to capitalize on high-probability, value-accretive business opportunities.
Following its strong Q1 financial performance, the company revised its growth guidance upwards. ADNOC L&S now aims to invest over $5 billion in energy-related maritime logistics over the medium term to meet growing demand in the UAE and globally.
Since the IPO, the company committed $3.9 billion to organic growth capex, predominantly against long-term contracts. Moreover, it recently announced an agreement to acquire Navig8 for $1.4 billion.
“These LNG carriers will employ cutting-edge technology to increase fuel efficiencies and carbon intensity reductions in line with the company’s sustainability goals and will open up new opportunities for customer and geographical expansion while unlocking increased value for our shareholders,” added Al Masabi.
Read: UAE: Petrol, diesel prices for July 2024 announced
Cutting-edge carriers
The LNG carriers for ADNOC L&S will each have a capacity of 174,000 cubic meters and feature MEGA and XDF2.2 engines to produce the best fuel economy and lowest emissions in the company’s global fleet.
In addition, the vessels will feature cutting-edge sustainability technologies including a cargo conditioning system that reduces LNG cargo evaporation while in transit, systems to direct cargo boil-off gasses to the engines that will increase fuel efficiency and decrease fuel consumption, a real-time emissions monitoring system, and pioneering cargo containment systems to reduce methane emissions.
These features will make the LNG carriers among the most fuel-efficient vessels in the world, bolstering ADNOC L&S’s position as a leader in maritime decarbonization and contributing to ADNOC Group’s 2045 Net Zero target.
For more news on energy, click here.
