ADNOC Logistics and Services plc (ADNOC L&S), a leading global energy maritime logistics firm, has announced that AW Shipping, its joint venture with Wanhua Chemical Group, has awarded shipbuilding contracts to Jiangnan Shipyard in China. The total value of these contracts is approximately $1.9 billion (AED 7 billion). The contract includes the construction of nine Very Large Ethane Carriers (VLECs) for about $1.4 billion (AED 5.1 billion) and two Very Large Ammonia Carriers (VLACs) for approximately $250 million (AED 900 million), with an option to add two more VLACs at the same price.

The new vessels will be among the largest ethane and ammonia carriers globally and will feature energy-efficient dual fuel engines. The VLECs are set to be deployed under 20-year time charter agreements, generating an estimated $4 billion (AED 14.7 billion) in revenue over the course of 180 years of contract coverage.

The contracts were signed in Beijing during a ceremony attended by His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO; Liao Zengtai, Chairman of Wanhua Chemical Group; Wu Xiande, Mayor of Fuzhou; Kai Hu, President of CSTC; Ou Lin, Chairman of Jiangnan Shipyard; and Wen Gang, Chairman of CSSC.

Captain Abdulkareem Al Masabi, Chairman of AW Shipping and CEO of ADNOC L&S, stated: “This new order from AW Shipping enhances ADNOC L&S’s fleet expansion efforts and strengthens our capacity to transport lower-carbon energy sources, supporting the energy transition. Notably, these vessels will generate significant revenue streams for ADNOC L&S, highlighting our dedication to value-driven strategic investments while serving our customers.”

There are currently over 25 VLECs in operation with various shipping companies globally. Once the nine new vessels are delivered, AW Shipping will possess one of the largest VLEC fleets in the world.

Kou Guangwu, President & CEO of Wanhua Chemical Group, commented: “We are delighted to place new shipbuilding orders for VLECs and VLACs with Jiangnan Shipyard in China through our AW Shipping joint venture with ADNOC L&S. This decision highlights the excellence of high-end Chinese equipment manufacturing and establishes a strong foundation for deepening our strategic partnership with ADNOC L&S. These eco-friendly, low-carbon vessels will help Wanhua reduce transportation emissions and advance our decarbonization goals, demonstrating our commitment to addressing climate change challenges.”

The AW Shipping joint venture was formed in 2020 to expand ADNOC L&S’s global operations and enhance the industrial relationship between the UAE and China. This recent order supports ADNOC L&S’s vision of investing over $5 billion (AED 18.4 billion) in value-enhancing projects following the Company’s ADX listing in June 2023.

Lin Ou, Chairman of Jiangnan Shipyard, remarked: “As a leading global shipbuilder specializing in the full range of gas carriers, Jiangnan is pleased to enhance our cooperation with ADNOC L&S. The newly ordered VLECs and VLACs are advanced, environmentally-friendly vessels developed by Jiangnan. We are dedicated to delivering these ships on schedule and to the highest quality standards, supporting ADNOC L&S in achieving its growth strategy and decarbonization goals.”

The VLECs each have a carrying capacity of 99,000 cubic meters and can operate on either ethane or traditional fuels. They are expected to be delivered between 2025 and 2027. The VLACs, which have a 93,000 cubic meter capacity for ammonia, can run on liquefied petroleum gas (LPG) or conventional fuels and are slated for delivery between 2026 and 2028.