Adnoc Logistics and Services Awards $2.5 Billion Contracts to South Korean Shipyards

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Adnoc Logistics and Services (L&S), the maritime logistics unit of Abu Dhabi hydrocarbons major Adnoc, has awarded shipbuilding contracts worth up to Dh9.2 billion ($2.5 billion) to South Korean shipyards Samsung Heavy Industries and Hanwha Ocean. The contracts include the construction of four liquefied natural gas (LNG) carriers each by Samsung Heavy and Hanwha, with an option for an additional carrier. These vessels are expected to be delivered beginning in 2028 and will be time-chartered to Adnoc’s group subsidiaries for 20 years to support the growing export volumes of LNG, a lower-carbon transitional fuel.

Fleet Expansion and Strategic Investments

“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,”said Capt Abdulkareem Al Masabi, Chief Executive of Adnoc L&S. The new LNG carriers will increase the company’s fleet from 14 to at least 22 vessels. Adnoc L&S has already committed more than 50 percent of its $4 billion to $5 billion medium-term strategic investment target, which was announced at the time of its listing last year. The company aims to invest in value-accretive business opportunities over the medium term as part of its transformational growth agenda.

Upward Revision of Growth Guidance

Earlier this year, Adnoc L&S revised its growth guidance upwards, announcing plans to invest over $5 billion in energy-related maritime logistics to meet growing demand within and beyond the UAE. In June, the company acquired an 80 percent stake in global shipping pool operator Navig8 TopCo Holdings for $1.04 billion, with ownership effective from January 1. The remaining 20 percent of Navig8 will be purchased in 2027 for an additional consideration between $335 million and $450 million. This acquisition is expected to save Adnoc L&S more than $100 million annually by reducing technical management and fuel costs. In 2022, Adnoc L&S also acquired ZMI, an Abu Dhabi company that owns and operates offshore support vessels.

Commitment to Sustainability and Efficiency

“These new LNG carriers will employ cutting-edge technology to increase fuel efficiencies and reduce carbon intensity, in line with the company’s sustainability goals. This will open new opportunities for customer and geographical expansion while unlocking increased value for our shareholders,” said Capt Al Masabi. Adnoc L&S currently delivers energy products to over 100 customers in about 50 countries through its three business units – integrated logistics, shipping, and marine services.

Financial Performance and Market Presence

Adnoc L&S debuted on the Abu Dhabi Securities Exchange in June last year after its parent company, Adnoc, raised about Dh2.83 billion from the sale of a 19 percent stake in the subsidiary. In May, Adnoc L&S reported a 34 percent increase in its first-quarter profit and raised its revenue forecast for the full year. The company has committed $3.9 billion to “organic growth capex,” primarily against long-term contracts, and remains dedicated to pursuing its growth agenda to expand its fleet size, customer base, and geographical footprint.

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Source: thenationalnews.com