① AW Shipping, a joint venture between ADNOC L&S and Wanhua Chemical Group, awarded a shipbuilding contract worth approximately $1.9 billion to Jiangnan shipyard in China; ② The contract included the option to build nine VLECs, two VLACs, and add two VLACs. The ships will be delivered by 2028 at the latest.
Finance Association, July 24 (Editor Li Lin/Intern Editor Wang Yifei) ADNOC Logistics & Services (ADNOC L&S), a logistics subsidiary of Abu Dhabi National Petroleum Corporation (ADNOC), said that AW Shipping, a joint venture with Wanhua Chemical Group, has awarded a shipbuilding contract worth 7 billion dirhams (about 1.9 billion US dollars) to China's Jiangnan shipyard.
Source: ADNOC L&S
According to documents submitted by the company to the Abu Dhabi Stock Exchange (ADX) on Tuesday, the contract includes the construction of nine very large ethane dual-fuel carriers (VLEC) at a price of $1.4 billion, and two very large liquid ammonia carriers (VLAC) at a price of $0.25 billion, as well as the option to order two additional VLACs at the same price.
The nine VLECs each have a capacity of about 99,000 cubic meters, and the delivery period is 2025 to 2027. At the same time, AW Shipping also signed a 20-year ship leasing contract. The charterer is Wanrong New Materials (Fujian) Company, a subsidiary of Wanhua Holdings. It is estimated that the nine VLECs will generate 4 billion US dollars in revenue during the lease period. In the future, these VLECs will meet Wanhua Chemical's capacity requirements for ethane and ethylene procurement, including the Fujian Joint Venture Project.
On Tuesday, ADNOC and its affiliated companies Borealis (Borealis) and Borouge (Borouge) signed a contract with Wanrong New Materials in Beijing to build a special polyolefin integrated facility with a production capacity of 1.6 million tons/year in Fujian.
Currently, there are about 25 VLECs in operation worldwide. Once these large vessels carrying ethane are delivered, AW Shipping will have one of the largest VLEC fleets in the world.
Each VLAC ordered this time has a capacity of about 93,000 cubic meters. The delivery time is 2026 to 2028, and can be powered by LPG or conventional fuel.
AW Shipping was founded in 2020 to expand ADNOC L&S's global business and strengthen the industrial relationship between the UAE and China. Currently, the company has 17 ships.
ADNOC L&S was founded in 2016 by ADNOC to build one of the world's largest integrated shipping and maritime logistics companies. These new ships are part of ADNOC L&S's transformation and growth strategy previously disclosed. The company plans to invest more than 5 billion US dollars in new investments after the stock listing in June 2023.
Jiangnan Shipbuilding has received many shipbuilding orders
Gangnam Shipyard played an important role in ADNOC L&S's fleet expansion process, and the cooperation between the two sides began in 2020. At the time, AW Shipping ordered 5 86,000-cubic meter dual-fuel VLGCs from Jiangnan Shipbuilding. These new ships were delivered one after another in 2022 and 2023.
In 2022, ADNOC L&S also successively ordered 6 0.175 million square Mark III Flex LNG carriers from Jiangnan shipyard. This is the first time that a Chinese shipyard has accepted an order for a MARK III thin-film large-scale LNG carrier, and it is also China's first order for a pure international market in the field of large LNG carriers.
At the beginning of this year, Jiangnan Shipyard also received a contract from ADNOC L&S to build 2+2 93,000 cubic meter oversized liquid ammonia carriers (VLAC), with a total contract value of 0.48 billion US dollars.
“This $1.9 billion investment marks a significant step forward in ADNOC's L&S transformation and growth strategy, as well as our commitment to expand our fleet to transport new energy resources and accelerate the achievement of decarbonization goals. Ethane and ammonia play a critical role in decarbonizing global industrial processes and shipping.” Abdulkareem Al Masabi, Chairman of AW Shipping and CEO of ADNOC L&S, said.
ADNOC's L&S transformation and growth strategy clearly awarded shipbuilding orders for more than just one shipyard in Jiangnan. Two major Korean shipping companies successfully obtained contracts for the construction of 10 LNG carriers at “rare” low prices in July. Hanwha Marine (formerly Daewoo Shipbuilding) and Samsung Heavy Industries signed a construction contract worth 2.5 billion US dollars to order 8+2 0.174 million-square LNG carriers.