Abu Dhabi – Mubasher: ADNOC Logistics & Services (ADNOC L&S), a global energy maritime logistics company, has announced that its joint venture (JV) with Wanhua Chemical Group, AW Shipping, has awarded shipbuilding contracts to Jiangnan Shipyard in China.
The total value of the contracts is approximately $1.90 billion (AED 7 billion), according to a press release.
The first contract is for the construction of nine very large ethane carriers (VLECs), priced at approximately $1.40 billion (AED 5.10 billion).
The second contract is for two very large ammonia carriers (VLACs), priced at approximately $250 million (AED 900 million), with an option for two additional VLACs at the same price.
The new vessels will be among the world's largest ethane and ammonia carriers, and will run on energy-efficient dual fuel engines.
The VLECs will be deployed on 20-year time charter contracts, generating revenue of $4 billion (AED 14.70 billion) through 180 years of contract coverage.
Captain Abdulkareem Al Masabi, Chairman of AW Shipping and CEO of ADNOC L&S, said: “This 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.”
Kou Guangwu, President and CEO of Wanhua Chemical Group, stated: “These green and low-carbon ships will support Wanhua to reduce transportation carbon emissions and accelerate the decarbonisation objectives and is a concrete commitment from Wanhua to better deal with the climate change challenges.”
Lin Ou, Chairman of Jiangnan Shipyard, said: “These newly ordered VLECs and VLACs are future-oriented green vessels developed by Jiangnan. We are committed to delivering these vessels on time and with good quality, to better help ADNOC L&S achieve its transformational growth strategy and decarbonisation objectives."
Currently, there are more than 25 VLECs in operation globally. Upon receiving the nine new vessels, AW Shipping will own one of the world's largest fleets of VLECs.
The AW Shipping joint venture was established in 2020 to expand ADNOC L&S' global operations and strengthen the industrial relationship between the UAE and China.
This latest order aligns with ADNOC L&S' vision to deploy more than $5 billion (AED 18.40 billion) in value-accretive investments following the company's ADX listing in June 2023.
The VLECs have a carrying capacity of 99,000 cubic meters each and can be powered by ethane or conventional fuels. They are scheduled for delivery between 2025-2027.
The VLACs have a carrying capacity of 93,000 cubic meters each for ammonia and can be powered by liquefied petroleum gas (LPG) or conventional fuels. They are scheduled for delivery between 2026-2028.
Earlier in July, ADNOC L&S awarded South Korean shipyards Samsung Heavy Industries and Hanwha Ocean shipbuilding agreements with a total value of up to $2.50 billion (AED 9.20 billion).
ADNOC L&S recorded a 34% annual leap in net profit to $194 million (AED 712 million) in the first quarter (Q1) of 2024 from $145 million (AED 533 million).
