ADNOC and Chinese Place $1.9B Order for Large Ethane and Ammonia Carriers

In an effort to position their joint venture at the forefront of the growing ethane market and anticipated ammonia transport market, the UAE and China announced an order for up to 13 of the largest gas carriers yet built. The order placed by AW Shipping, the joint venture between ADNOC Logistics and Services and China’s Wanhua Chemical Group, is being valued at approximately $1.9 billion to be built by China’s Jiangnan Shipyard.

The companies highlight that currently there are only 25 very large ethane carriers (VLEC) in operation while demand is expected to grow. AW Shipping ordered nine VLECs valued at $1.4 billion and scheduled for delivery between 2025 and 2027. The vessels will have a carrying capacity of 99,000 cm and can be powered either by ethane or conventional fuels. They will be among the largest vessels of their kind preparing the joint venture for anticipated continuing demand in the sector.

AW Shipping will also be among the pioneering companies that are moving ahead with very large ammonia carriers (VLACs) for the anticipated market to move ammonia as it develops as an alternative fuel and also as a hydrogen carrier. The new order includes two VLACs priced at approximately $250 million with an option for two additional VLACs at the same price. These vessels will have a capacity of 93,000 cm and can be powered by liquified petroleum gas (LPG) or conventional fuels. They will deliver between 2026 and 2028.

“These newly ordered VLECs and VLACs are future-oriented green vessels developed by Jiangnan,” said Lin Ou, Chairman of Jiangnan Shipyard. “We are committed to delivering these vessels on time and with good quality, to better help ADNOC L&S achieve its transformational growth strategy and decarbonization objectives."

The new vessels are part of a strategy recently outlined by ADNOC L&S to deploy more than $5 billion for new investments after its June 2023 stock listing. ADNOC L&S was formed in 2016 by the UAE’s Abu Dhabi National Oil Company, one of the twelve largest oil companies in the world. The L&S group was designed to create one of the largest integrated shipping and maritime logistics companies. Among the group’s other investments was news of a recent order for eight to ten LNG carriers each with a 174,000 cm capacity to be built in South Korea.

“This $1.9 billion investment represents a major step forward in the ADNOC L&S transformational growth strategy and our commitment to expanding our fleet to carry new energy resources and accelerate our decarbonization objectives. Ethane and ammonia are playing vital roles in decarbonizing both global industrial processes and the shipping industry,” said Captain Abdulkareem Al Masabi, Chairman of AW Shipping and CEO of ADNOC L&S.

AW Shipping was launched in 2020 to own and operate a fleet of very large gas carriers and modern product tankers. ADNOC and Wanhau committed to transporting LPG cargoes and other petroleum products sourced from ADNOC to Wanhua’s manufacturing facilities in China and elsewhere. This latest will produce significant income for ADNOC L&S under charter agreements while positioning the joint venture in the emerging markets.