Adnoc L&S unveils logistics platform and signs $2.6bn contract with Adnoc Offshore

The five-year deal, with the option of a five-year extension, will see more than 80% of contract value flowing back into the UAE economy through the In-Country Value programme

The headquarters of Adnoc. The agreement between Adnoc L&S and Adnoc Offshore includes the provision of port services, warehouse operations, heavy lifting, material handling and shipping. AFP

Adnoc Logistics & Services, an Adnoc subsidiary, on Wednesday unveiled its global Integrated Logistics Services Platform (ILSP) and said it has signed a $2.6 billion contract with Adnoc Offshore to provide logistics services.

The five-year agreement, with the option of a five-year extension, will see more than 80 per cent of the contract value flowing back into the UAE’s economy through Adnoc’s In-Country Value (ICV) programme, the company said in a statement.

The agreement includes the provision of port services, warehouse operations, heavy lifting, material handling and shipping, rig and barge moves, marine terminal operations and waste management services.

“We are very pleased to extend our decades’ long collaboration with Adnoc Offshore as we unveil our ILSP and continue to revolutionise offshore oil and gas logistics,” said Abdulkareem Al Masabi, chief executive of Adnoc L&S.

“The ILSP is a unique offering that centralises all logistics requirements for our customers through a single interface, optimising efficiencies and reducing logistics costs.”

The ILSP is among the largest turnkey offshore logistics offerings in the world that will enable Adnoc L&S to co-ordinate end-to-end management of logistics and maritime operations from its Mussafah base in Abu Dhabi.

The platform is created as part of the company’s commitment to support the “continued growth of the region’s energy sector”.

By managing all logistics requirements through one system, ILSP can reduce project logistics costs, with customers being invoiced in a cost-per-tonne format, moving away from the standard asset lease model, Adnoc said.

The partnership will “enhance the efficiency of our operations, as we continue to strengthen Adnoc’s position as a low-cost, lower carbon intensity energy producer”, said Tayba Al Hashemi, chief executive of Adnoc Offshore.

Adnoc L&S is undertaking a global expansion programme, aimed at offering a broader service to its customers while supporting and enabling the growth of Adnoc’s upstream and downstream operations.

The company has the most diversified fleet in the Middle East, owning 245 vessels and managing more than 600 vessels annually.

Its fleet and its 1.5 million square metres integrated logistics base position the company as a global maritime logistics leader, Mr Al Masabi said.

The deal follows Adnoc Offshore's award of a $1.17 billion contract to Adnoc L&S to boost its offshore production capacity.

The deal signed in August last year includes hiring 13 self-propelled jack-up barges to be used across Adnoc's offshore fields to drive its offshore operational efficiencies and support the expansion of its oil production capacity, it said at the time.

In July last year, Adnoc L&S bought Zakher Marine International, an Abu Dhabi-based company that owns and operates offshore support vessels, to expand its fleet.

In June, the company bought three new liquefied natural gas vessels to expand its fleet in order to meet rising demand for LNG globally.