ADNOC Logistics and Services plc, a global energy maritime logistics company, announced that AW Shipping, its joint venture with Wanhua Chemical Group, has awarded shipbuilding contracts to Jiangnan Shipyard in China, with a total value of approximately $1.9 billion (AED7 billion). The contract for the construction of nine Very Large Ethane Carriers (VLECs) is valued at approximately $1.4 billion (AED5.1 billion), while the contract for two Very Large Ammonia Carriers (VLACs) is valued at approximately $250 million (AED900 million), with an option for an additional two VLACs at the same price.
The new vessels will be among the world’s largest ethane and ammonia carriers and will feature energy-efficient dual fuel engines. The VLECs will be deployed under 20-year time charter contracts, generating revenue of $4 billion (AED14.7 billion) through 180 years of contract coverage.
The contracts were signed in Beijing at a ceremony attended by His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO; Liao Zengtai, Wanhua Chemical Group Chairman; Wu Xiande, Fuzhou Government Mayor; Kai Hu, CSTC President; Ou Lin, Jiangnan Shipyard Chairman; and Wen Gang, CSSC Chairman.
Captain Abdulkareem Al Masabi, Chairman of AW Shipping and CEO of ADNOC L&S, stated “This new order by AW Shipping reinforces ADNOC L&S’ ongoing fleet expansion and will enhance our capability to transport lower-carbon energy sources and support the energy transition. Importantly, the vessels will generate substantial revenue streams for ADNOC L&S, underscoring our commitment to value-accretive strategic investments as we serve our customers.”
Currently, there are more than 25 VLECs in operation with various shipping companies worldwide. Upon receiving the nine new vessels, AW Shipping will own one of the world’s largest fleets of VLECs.
Kou Guangwu, President & CEO of Wanhua Chemical Group, commented “We are extremely pleased to place new VLECs and VLACs shipbuilding orders with Jiangnan Shipyard in China, together with our strategic partner ADNOC L&S through our AW Shipping joint venture. This order is a firm recognition of high-end Chinese equipment manufacturing capability and creates a solid foundation for deepening the strategic cooperation between Wanhua and ADNOC L&S. These green and low-carbon ships will support Wanhua in reducing transportation carbon emissions and accelerating decarbonization objectives, representing a concrete commitment from Wanhua to address climate change challenges.”
The AW Shipping joint venture was established in 2020 to expand ADNOC L&S’ global operations and strengthen industrial relations between the UAE and China. This latest order aligns with ADNOC L&S’ vision to invest more than $5 billion (AED18.4 billion) in value-accretive investments following the Company’s ADX listing in June 2023.
Lin Ou, Chairman of Jiangnan Shipyard, said “As a global leading shipbuilding company specialized in the full series of gas carriers, Jiangnan is delighted to further strengthen our cooperation and 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 high quality to better support ADNOC L&S in achieving its transformational growth strategy and decarbonization objectives.”
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 and 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 and 2028.
About ADNOC L&S
ADNOC Logistics & Services plc, listed on the Abu Dhabi Securities Exchange (ADX symbol ADNOCLS / ISIN AEE01268A239), is a global energy maritime logistics company based in Abu Dhabi. Through its three business units—integrated logistics, shipping, and marine services—ADNOC L&S delivers energy products to more than 100 customers in over 50 countries.
Source ADNOC L&S