ADNOC Logistics & Services (ADNOC L&S), the shipping and maritime logistics arm of Abu Dhabi National Oil Company (ADNOC), has announced the acquisition of six VLCCs, two of which have already been deployed within the company’s fleet. Additionally, ADNOC L&S has placed an order with South Korean shipyard, DSME, for three newbuild VLCCs, with options for more, which will be delivered in 2022 and 2023, and has purchased one further existing vessel that will be joining its fleet shortly. These VLCCs are the first crude oil carriers to join the company’s operations and will consolidate its position as the owner and operator of the largest shipping fleet in the UAE.
Alongside the fleet expansion, ADNOC is expanding its trading operations. Two new ventures have been established in recent months. ADNOC Trading, which is focused on crude oil derivatives trading, was set up in September 2020 while ADNOC Global Trading (AGT), a joint venture with ENI and OMV that will focus on the trading of refined products, commenced in December.
Captain Abdulkareem Al Masabi, CEO, ADNOC L&S, said, “The acquisition of these six VLCCs is one of our most significant growth steps to date. 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 streams to our business.”
The company points out that given recent market conditions, it has been able to purchase both existing and newbuild vessels at competitive prices. Captain Abdulkareem adds, “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.”
Built to ADNOC’s specifications, the newbuild vessels will be equipped with advanced smart ship technology. While the new VLCCs will be built in Korea, ADNOC L&S has secured higher levels of In-Country Value (ICV) for this contract by ensuring that project management and design work for the vessels is undertaken in the UAE. In addition, a team of UAE nationals from ADNOC L&S will work closely with the design and project management teams to enhance their knowledge and experience in the design, construction and future maintenance of VLCC vessels.
The establishment of a new VLCC fleet comes as ADNOC progresses its plans to increase its oil production capacity. The company currently has a capacity of over 4 million barrels of oil per day (mbopd), which it intends to grow to 5 mbopd by 2030.
ADNOC L&S had already expanded its fleet of deep sea vessels in recent months, having confirmed an order of five newbuild and one second-hand gas carrier for AW Shipping, its joint venture with Wanhua Chemical Group, all of which will operate on a dual fuel basis. The company has also recently announced the purchase of four bulk carriers, including three Ultramax vessels and one Handysize bulker.