Adnoc Logistics and Services has awarded South Korean shipyards Samsung Heavy Industries and Hanwha Ocean up to Dh9.2 billion ($2.5 billion) in shipbuilding contracts to build liquefied natural gas carriers as part of the company’s fleet expansion plans.
The maritime logistics unit of Abu Dhabi hydrocarbons major Adnoc has awarded firm shipbuilding contracts for the construction of four vessels each with Samsung Heavy and Hanwha, with the option for an additional carrier, Adnoc L&S said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
The ships are expected to be delivered beginning in 2028 and will be time chartered to Adnoc’s group subsidiaries for 20 years to support the growing export volumes of LNG, a lower-carbon transitional fuel.
“The shipbuilding contracts with Samsung Heavy Industries and Hanwha Ocean are major steps forward in our transformational growth strategy, demonstrating Adnoc L&S’ steadfast commitment to value accretive strategic investments,” Capt Abdulkareem Al Masabi, chief executive of Adnoc L&S, said.
The new LNG carriers will take the company’s fleet from the current 14 to at least 22.
Adnoc L&S has so far committed more than 50 per cent of its $4 billion to $5 billion medium-term strategic investment target, which it had announced at the time of listing last year.
The company is looking to invest in value-accretive business opportunities over the medium term as part of its transformational growth agenda.
Earlier this year, the company revised its growth guidance upwards and said it now intends to invest in excess of $5 billion in energy-related maritime logistics to meet growing demand in and beyond the UAE.
In June, L&S said it is acquiring global shipping pool operator Navig8 TopCo Holdings to strengthen its fleet and expand into other markets.
It has taken an 80 per cent stake in Navig8 for $1.04 billion, with ownership taking effect on January 1 this year and will purchase the remaining 20 per cent of Navig8 in 2027 for an additional consideration in the range of $335 million to $450 million, it said in a bourse filing at the time.
The acquisition will allow Adnoc L&S to save more than $100 million each year by reducing technical management and fuel costs.
The deal is Adnoc L&S’ second major acquisition in about two years. In 2022, it acquired ZMI, an Abu Dhabi company that owns and operates offshore support vessels.
Before the acquisition, ZMI, which is currently an independent entity under Adnoc L&S, was the world’s largest owner and operator of self-propelled jack-up barges, with operations in the UAE, Saudi Arabia, Qatar and China.
Adnoc L&S said since its IPO, it has committed $3.9 billion to “organic growth capex”, predominantly against long-term contracts and it remains committed to pursue its growth agenda to expand its fleet size, customer base as well as its geographical footprint.
“These [new] LNG carriers will employ cutting edge technology to increase fuel efficiencies and carbon intensity reductions in line with the company’s sustainability goals and will open new opportunities for customer and geographical expansion while unlocking increased value for our shareholders,” said Capt Al Masabi.
Adnoc L&S currently delivers energy products to more than 100 customers in about 50 countries through its three business units – integrated logistics, shipping and marine services.
The company made its debut on the Abu Dhabi bourse in June last year after parent company Adnoc raised about Dh2.83 billion from the sale of a 19 per cent stake in the subsidiary.
In May, Adnoc L&S reported a 34 per cent increase in its first-quarter profit and raised its revenue forecast for the full year.
If you go
Flights
Emirates flies from Dubai to Phnom Penh with a stop in Yangon from Dh3,075, and Etihad flies from Abu Dhabi to Phnom Penh with its partner Bangkok Airlines from Dh2,763. These trips take about nine hours each and both include taxes. From there, a road transfer takes at least four hours; airlines including KC Airlines (www.kcairlines.com) offer quick connecting flights from Phnom Penh to Sihanoukville from about $100 (Dh367) return including taxes. Air Asia, Malindo Air and Malaysian Airlines fly direct from Kuala Lumpur to Sihanoukville from $54 each way. Next year, direct flights are due to launch between Bangkok and Sihanoukville, which will cut the journey time by a third.
The stay
Rooms at Alila Villas Koh Russey (www.alilahotels.com/ kohrussey) cost from $385 per night including taxes.
Dubai World Cup factbox
Most wins by a trainer: Godolphin’s Saeed bin Suroor(9)
Most wins by a jockey: Jerry Bailey(4)
Most wins by an owner: Godolphin(9)
Most wins by a horse: Godolphin’s Thunder Snow(2)
Wenger's Arsenal reign in numbers
1,228 - games at the helm, ahead of Sunday's Premier League fixture against West Ham United.
704 - wins to date as Arsenal manager.
3 - Premier League title wins, the last during an unbeaten Invincibles campaign of 2003/04.
1,549 - goals scored in Premier League matches by Wenger's teams.
10 - major trophies won.
473 - Premier League victories.
7 - FA Cup triumphs, with three of those having come the last four seasons.
151 - Premier League losses.
21 - full seasons in charge.
49 - games unbeaten in the Premier League from May 2003 to October 2004.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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