ADNOC Logistics & Services (ADNOC L&S), the shipping and maritime logistics subsidiary of UAE energy giant ADNOC, has made its first foray into the Very Large Ammonia Carrier (VLAC) market by ordering new VLACs from a China shipyard.
ADNOC L&S has ordered 2+2 liquefied petroleum gas (LPG) dual-fuel powered VLACs from Jiangnan Shipbuilding, a subsidiary of China State Shipbuilding Corporation (CSSC). The new VLACs can be used to transport ammonia or LPG.
Early this year, the industry reported that ADNOC L&S was planning to order 6+4 175,000 m3 liquefied natural gas (LNG) carriers and 4 VLACs.
According to reports at the time, due to the tight slots in shipyards, the inquiry value of this series of orders was as high as $3 billion.
Today, green ammonia is considered one of the most promising alternative fuels for achieving zero-carbon shipping. As the demand for ammonia fuel is expected to expand, the demand for long-distance carriers for stable supply of liquid ammonia is also expected to increase.
According to incomplete statistics, excluding ADNOC L&S’s latest order, 24 VLACs have been ordered globally this year, all of which are undertaken by Korean shipbuilders.
Among them, Samsung Heavy Industries and Hanwha Ocean were awarded 2 VLACs respectively; the other 20 units were all contracted by HD Korea Shipbuilding & Offshore Engineering (HD KSOE), whose shipbuilding subsidiaries HD Hyundai Heavy Industries and HD Hyundai Samho constructed 12 and 8 units respectively.
China’s shipbuilding industry has already made important breakthroughs in VLAC market and has received orders before.
In May 2023, Jiangnan Shipbuilding signed a contract with Eastern Pacific Shipping (EPS) of Singapore for the construction of four 93,000 m³ VLACs, which was the first VLAC order for the shipyard.Four months later, EPS announced an additional order for two more 93,000 m³ VLACs from Jiangnan Shipbuilding.
It is worth noting that the above VLAC order is not the first cooperation between ADNOC L&S and Jiangnan Shipbuilding in gas carriers. In March 2022, Jiangnan Shipbuilding signed a contract with ADNOC L&S for the construction of two 175,000 m³ LNG carriers. In May of the same year, the two parties signed another order for three 175,000 m³ LNG carriers.
Founded in 1971, ADNOC is a state-owned oil company in the United Arab Emirates and is a world-class group of companies in the oil and gas industry. Its product chain covers almost every field and every variety of oil, gas and petrochemicals.
At the end of 2016, ADNOC established a shipping and maritime logistics subsidiary, ADNOC L&S, by integrating three of its subsidiaries.ADNOC L&S said that ADNOC plans to double its LNG production capacity, and that fleet expansion will be a key enabler of the company’s growth strategy.