One of the region’s leading shipowners, ADNOC Logistics and Services, has announced plans to significantly expand its fleet over the next five years. This is to enable it to capitalise on growth opportunities in maritime markets and to meet the strategic needs of both its parent company and the UAE in general.
The company’s intention is to begin to increase the size of its merchant fleet over the course of this current year with the introduction of three vessels, which will involve the purchase of both VLCC and VLGC type tonnage. This will be the first phase of a programme that will eventually boost the merchant fleet by 25 ships over a five-year period. These planned acquisitions will include the company’s first vessels designed for crude oil transportation, as well as additional gas carriers and bulkers. The aim is to add a mix of chartered and owned ships, in order to offer the flexibility its customers need, the company states.
The initiative will enable parent group ADNOC to sell more of its commodities on a ‘delivered basis’, increase its global reach, unlock new market opportunities and extend the value of its supply chain. ADNOC Logistics & Services is a crucial link in the ADNOC supply chain, delivering oil, gas and petroleum products to customers across the world.
Capt. Abdulkareem Al Masabi, ADNOC Logistics & Services, chief executive, said: “We have set out an ambitious five-year strategy for growth which defines our intent to meet ADNOC and the UAE’s present and future requirements, while pursuing opportunities in fast growing global markets.”
The ability to transport greater volumes of oil and petroleum products is of significant importance, he suggests. “The delivery of ADNOC Group’s 2030 smart growth strategy will result in a substantial increase in the company’s production of crude oil, refined products and petrochemicals. Combined with ADNOC’s move into trading, which means it will take greater control over the delivery of its products to customers and end users, ADNOC Logistics & Services is expected to grow and diversify in order to meet the ever complex and evolving needs of the industry,” he added.
ADNOC Logistics & Services was formed in late 2016 from the amalgamation of three ADNOC subsidiaries, ADNATCO, IRSHAD and ESNAAD. The integration has created synergies between shipping, marine services, offshore logistics and onshore services, thereby enhancing overall capabilities. Following the integration, ADNOC Logistics & Services says it has increased revenues by 34%, while the company’s net operating profit has risen 220%.
ADNOC Logistics & Services recently signed a Memorandum of Understanding with China’s Wanhua Petrochemical to explore the creation of a joint venture, to pave the way for the transport of greater gas volumes between the UAE and China in line with market demand. Wanhua Petrochemical is an existing customer of ADNOC, having signed 10-year LPG purchase contract for around 1 million tonnes a year.