ADNOC L&S Joint Venture Secures $1.9 Billion For Ethane And Ammonia Carriers
ADNOC Logistics and Services plc (ADNOC L&S) has announced that AW Shipping, its joint venture with Wanhua Chemical Group, has awarded shipbuilding contracts worth approximately $1.9 billion to Jiangnan Shipyard in China. The contracts include the construction of nine Very Large Ethane Carriers (VLECs) valued at around $14 billion and two Large Ammonia Carriers (VLAC) priced at about $250 million, with an option for two VLACs.
The new vessels will feature energy-efficient dual engines and will be among the largest ethane and ammonia carriers globally. The VLECs will operate under a 20-year time charter contracts, expected to generate revenue of $4 billion over 180 years of contract coverage.
Captain Abdulkareem Al Masabi, Chairman of AW Shipping and CEO of ADNOC L&S, stated: " order by AW Shipping reinforces ADNOC L&S' ongoing fleet expansion and will our ability to transport lower-carbon energy sources and support the energy transition. Import, the vessels will generate substantial revenue streams for ADNOC L&S, underscoring our commitment to value-accretive strategic investments as we serve our."
The signing ceremony took place in Beijing, attended by notable including Dr. Sultan Ahmed Al Jaber, UAE Minister Industry and Advanced Technology and ADNOC Managing Director and Group CEO; Liaoengtai, Wanhua Chemical Group Chairman; Wu Xiande, Fuz Government Mayor; Kai Hu, CSTC President; Ou Lin, Jiangnan Shipyard Chairman; and Wen Gang, CSSC Chairman.
Kou Guangwu, President & CEO of Wanhua Chemical Group, remarked: "We are extremely happy to place new VLECs and VLACs shipbuilding orders to Chinese Jiangnan Shipyard together with our strategic partner ADNOC L&S through our AW Shipping joint venture, which is a firm recognition of high-end Chinese equipment manufacturing capability and creates a solid foundation to further deepen the strategic cooperation between Wanhua and ADNOC L&S.
"These green and low-carbon ships will support Wanhua to reduce transportation carbon emissions and accelerate the decarbonization objectives and is a concrete commitment from Wanhua to better deal with the climate change challenges."
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.
Strengthening Global Operations
The AW Shipping joint venture was established in 2020 to expand ADNOC L&S' global operations and enhance industrial ties between the UAE and China. This latest order aligns with ADNOC L&S' vision to invest over $5 billion following its ADX listing in June 2023.
Lin Ou, Chairman of Jiangnan Shipyard, commented: "As a global leading shipbuilding company specialized in the full series of gas carriers, Jiangnan is delighted to strengthen further cooperation and our relationship with ADNOC L&S. 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 decarbonization objectives."
Currently, more than 25 VLECs are operational worldwide with various shipping companies. Upon receiving the nine new vessels, AW Shipping will possess one of the largest fleets of VLECs globally.
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