Adnoc L&S acquires six crude carriers to expand global reach
The addition of new vessels will add a total cargo capacity of 12 million barrels of oil
Adnoc Logistics and Services is acquiring six Very Large Crude Carriers (VLCCs) as the shipping and maritime logistics arm of Abu Dhabi National Oil Company continues to expand operations and add more vessels to its fleet.
Two VLCCs have already been added to Adnoc L&S fleet and another will join shortly. The company has also placed an order for three new-build vessels, which will be delivered in 2022 and 2023, the company said in a statement on Thursday. These vessels are the first VLCCs to join the Adnoc L&S fleet, adding a total cargo capacity of 12 million barrels.
“The acquisition of these six VLCCs is one of our most significant growth steps to-date,” Capt Abdulkareem Al Masabi, chief executive of Adnoc L&S, said.
“This strategic move allows us to offer new services to our customers and supports Adnoc and its trading entities to access new global energy markets, while also delivering incremental value and a new revenue stream to our business.”
Adnoc L&S was able to purchase both existing and new-build vessels at competitive prices given current market conditions, he said, without giving financial details of the deals.
“Owning these vessels will deliver cost efficiencies for our business, as opposed to chartering vessels, while also enabling us to provide a more reliable service to customers,” he said.
Adnoc L&S, which owns and operates the largest shipping fleet in the UAE, is pursuing a major fleet expansion programme to expand its reach and better serve its global customers. The company aims to support its parent Adnoc as it increases production and refining capacity as well as growing its new trading operations.
Adnoc plans to grow oil production capacity from its current 4 million barrels per day of crude to 5 million bpd by 2030.
It also plans to double its refining capacity and treble its petrochemicals capacity, with a joint venture with state holding company ADQ targeting $5bn of projects at a derivatives park in Ruwais.
The company also set up two trading ventures last year. Adnoc Trading is focused on crude oil and started derivatives trading in September. Adnoc Global Trading, a joint venture with Italy’s ENI and Austrian OMV, focuses on the trading of refined products and began operations in December.
Adnoc L&S said the new-build vessels will also create in-country value as the project management and design work for them is being undertaken in the UAE.
Adnoc L&S grew its fleet with 16 deep-sea vessels in 2020. In addition to its new VLCC fleet, the company confirmed the order of five new-build and one second-hand Dual Fuel Very Large Gas Carriers (VLGCs) for AW Shipping, its joint venture with Wanhua Chemical Group. The company recently also announced the purchase of four bulk carriers.
Adnoc is looking for “smart growth” opportunities and joint ventures as it plans to add 10 liquefied petroleum gas and long-range product tankers to its portfolio, Capt Al Massabi told The National in August.
Published: February 25, 2021 05:28 PM