Abu Dhabi National Oil Company's logistics and services subsidiary Adnoc L&S signed a ship building contract for the construction of two liquefied natural gas (LNG) vessels at the Jiangnan Shipyard in China, as the company expands its shipping fleet to meet higher demand for LNG globally.
The two new vessels will join the company’s fleet in 2025 and "will be crucial enablers of Adnoc’s 2030 growth strategy, supporting its existing LNG business as well as its ambitions to grow its LNG production capacity”, Adnoc said in a statement on Tuesday.
Adnoc L&S has the largest and most diversified fleet of vessels in the Middle East and its trading fleet transports crude oil, refined products, dry bulk, containerised cargo, liquefied petroleum gas and LNG to global markets through its owned and chartered vessels.
Over the past 24 months, the company acquired 16 deep sea vessels, including eight very large crude carriers in 2021, adding 16 million barrels of capacity, six product tankers, which expanded the product tanker fleet capacity to over 1 million metric tonnes as well as five very large gas carriers for AW Shipping, Adnoc L&S’ joint venture company with China’s Wanhua Chemical Group.
“This acquisition helps future-proof our fleet with more sustainable, modern vessels capable of serving our customers for the next 25 years and deepens our partnership with Jiangnan Shipyard,” said Captain Abdulkareem Al Masabi, chief executive of Adnoc L&S.
Global trade in LNG rose 6 per cent to 380 million tonnes in 2021 on the back of higher demand as economies recovered from the coronavirus-induced slowdown and countries focused on cutting emissions, Shell said in its latest LNG outlook report. China, the world's second-largest economy, and South Korea, led the growth in LNG demand last year.
Adnoc's new vessels, each with a capacity of 175,000 cubic metres, are significantly larger than its current fleet of LNG vessels which have a capacity of 137,000 cubic metres each, the statement said. Each of the new vessels will carry enough LNG to power 45,000 homes for a year.
"The acquisition of larger, more energy efficient vessels will allow Adnoc L&S to meet growing customer demand while improving the environmental footprint of its fleet," the company said.
LNG turns into a colourless and non-toxic liquid when cooled to about minus 162°C temperature. The cooling process shrinks the volume of the gas, making it easy to ship and store. It can be used for cooking, heating homes, manufacturing products and fuelling commercial vehicles.
Earlier this year, Adnoc L&Ssigned an agreement, its second in two years, with Singapore's Atlantic Gulf & Pacific company to lease one of its LNG vessels to be used as a floating storage unit.