Middle Eastern energy giant to expand fleet with order for 14 tankers!

2020-08-28 09:00

To enhance the UAE's position as a global energy hub, Abu Dhabi National Oil Company (ADNOC) plans to fully integrate its logistics and transportation companies to expand its fleet, and will order up to 14 oil tankers with a total value exceeding US$900 million.

It is reported that ADNOC's shipping and logistics subsidiary, ADNOC Logistics & Services (ADNOC L&S), will place orders for 3+3 VLCCs and 4+4 LR2 product tankers. According to TradeWinds, ADNOC L&S has invited eight shipyards to submit bids. The company will consider ordering LNG-powered vessels, and shipyards will also propose this as one of the options. ADNOC L&S is expected to make a final decision on the orders within this year.

Sources estimate that each VLCC will cost approximately US$87 million, while LR2 product tankers are priced close to US$50 million, and LNG-powered vessels will be even more expensive.

ADNOC, a state-owned oil enterprise in the UAE, was established in 1971 and is a world-class oil and gas industry group. Its product chain covers almost all areas and varieties of oil, natural gas, and petrochemicals, making it one of the world's largest oil and gas producers and suppliers. It is understood that ADNOC L&S is a key enabler of the ADNOC value chain, providing oil, natural gas, and petroleum derivative products to global customers, and owning and operating the UAE's largest transportation fleet. Last year, ADNOC L&S transported over 20 million tons of various oil, natural gas, and dry bulk products.

ADNOC L&S was formed at the end of 2016 by three ADNOC subsidiaries: ADNATCO, IRSHAD, and ESNAAD. The integration created synergies between shipping, marine services, offshore logistics, and onshore logistics, thereby establishing the largest integrated shipping and marine logistics company within the GCC.

It is reported that ADNOC L&S is expanding its fleet. Last February, the company disclosed plans to add over 25 vessels within the next 5 years, acquire its first crude oil tankers, and expand its liquefied gas and dry bulk carrier fleets, thereby aligning with ADNOC's 2030 Smart Growth Strategy. Through this strategy, ADNOC aims to increase its oil production to 5 million barrels per day by 2030. ADNOC L&S's fleet expansion will enable ADNOC to sell more commodities "on a delivered basis," increase its global presence, unlock new market opportunities, and enhance the value of its supply chain.

On July 23, 2019, ADNOC signed a cooperation framework agreement with China's Wanhua Chemical Group, with a potential value of up to US$12 billion. This agreement will facilitate cooperation in the downstream industries of both parties, including the refining, sales, and transportation of liquefied petroleum gas (LPG).

Meanwhile, AW Shipping also ordered 3 x 86,000 cbm LNG dual-fuel VLGCs from Jiangnan Shipyard, with new vessels scheduled for delivery in the third and fourth quarters of 2022. These VLGCs have an overall length of 230 meters, a breadth of 36.6 meters, a depth of 22.2 meters, and a design draft of 11.5 meters. They comply with the new IGC Code, Tier III emission standards, and the latest SOx emission requirements, featuring energy efficiency and environmental protection.

It is reported that the UAE recently made significant new oil and gas discoveries, increasing its oil and gas reserves by 7 billion barrels of crude oil and 58 trillion standard cubic feet of conventional natural gas. This has moved the UAE from 7th to 6th place in global oil and gas reserves.

As a representative of Arab nations, Saudi Arabia holds the most important position in both OPEC and international oil affairs. For this reason, the Crown Prince of Abu Dhabi stated: Abu Dhabi's position as a global energy hub must be enhanced.

UAE Minister of Industry and Advanced Technology, Sultan Ahmed Al Jaber, stated: "The joint venture further solidifies Adnoc L&S's position as the largest and fully integrated logistics and transportation company in the United Arab Emirates, laying the groundwork for transporting more LPG to China in line with market demand."

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