ADNOC Logistics Expands Its LNG Fleet with AED 9.2 Billion Investment

ADNOC Logistics & Services PLC (ADNOC) has announced that it has awarded contracts worth up to AED 9.2 billion ($2.5 billion) to South Korea’s Samsung Heavy Industries and Hanwha Ocean to build new LNG carriers as part of the company’s transformational growth strategy and its own fleet expansion plans.

South Korea’s Samsung Heavy Industries and Hanwha Ocean have been awarded shipbuilding contracts to build four confirmed tankers with an option to build one additional tanker.

The vessels are expected to be delivered from 2028 and will be chartered to ADNOC Group companies for 20 years to support the growing production of natural gas as a transitional, low-carbon fuel. With these new vessels, ADNOC Logistics & Services’ LNG fleet will increase from 14 to at least 22 vessels.

“The new tanker construction contracts with Samsung Heavy Industries and Hanwha Ocean represent a key step in the delivery of our transformational growth strategy and are a tangible demonstration of ADNOC L&S’ commitment to strategic, value-accretive investments,” said Captain Abdulkareem Al Masabi, CEO of ADNOC L&S. “We are now more than 50% committed to delivering our medium-term investment targets within one year of our record-breaking IPO in 2023.”

At the time of its initial public offering last year, ADNOC L&S committed to investing between AED 14.7 billion and AED 18.4 billion (US$ 4 billion and 5 billion) over the medium term to capitalise on potential value-accretive business opportunities. Following a strong first quarter financial performance and continued growth across all business segments, the company has revised its financial results upwards to target investments of over AED 18.4 billion (US$ 5 billion) in maritime and energy logistics over the medium term to meet growing demand in the UAE and beyond.

Realising value-accretive growth opportunities is an additional achievement, especially after the announcement of the recent acquisition of Navig8 for AED 5 billion (USD 1.4 billion).

Since its IPO, the company has already committed AED 14.3 billion (US$ 3.9 billion) to capital expenditure for organic growth, with a primary focus on long-term contracts. The company also recently announced an agreement to acquire Navig8 Topco Holding for AED 5 billion (US$ 1.4 billion), unlocking further growth opportunities and value accretive. ADNOC L&S continues to drive its transformational growth strategy to expand its fleet size, customer base and geographic footprint.

“These LNG carriers will use the latest technologies to increase fuel efficiency and reduce carbon emissions in line with the company’s sustainability goals, and will open new avenues for customer growth and geographic expansion while delivering increased value for our shareholders,” added Captain Abdulkareem Al Masabi. “ADNOC L&S is proud to partner with these two world-class shipyards, further strengthening our industrial relationship with South Korea.”

The LNG carriers will have a capacity of 174,000 cubic meters each. They will be equipped with the lowest fuel consumption and carbon emissions in the company’s global fleet, MEGA and XDF2.2 engines. They will use the latest sustainability technologies, including an air conditioning system designed to reduce evaporation of LNG cargoes during transportation, dedicated systems to direct evaporated gas to the engines to enhance fuel efficiency and reduce fuel consumption, in addition to using a real-time emissions monitoring system and pioneering storage systems to reduce methane emissions.

With all these features, the new tankers will be among the most fuel efficient in the world, strengthening ADNOC L&S’ position as a leader in reducing carbon emissions from maritime operations, and supporting ADNOC Group’s goal of achieving climate neutrality by 2045.