Company plans to buy 25 vessels within the next five years
His Highness Sheikh Theyab bin Mohamed bin Zayed Al Nahyan, a member of Abu Dhabi’s Executive Council and Supreme Petroleum Council and Chairman of the Abu Dhabi Department of Transport was updated on ADNOC Logistics & Services’ (ADNOC L&S) strategic growth plans during a recent visit to Abu Dhabi’s Khalifa Port.
ADNOC L&S is the maritime and logistics arm of the Abu Dhabi National Oil Company (ADNOC) and plans to transform it into a global shipping champion.
During the visit, H.H. Sheikh Theyab heard how ADNOC’s ambitious growth plan will create a more competitive and diverse offering, to leverage market expansion while strengthening its role by transforming into a fully integrated marketer and trader of its products.
This will be enabled by its shipping arm ADNOC L&S. The Company plans to acquire its first crude oil tankers, while expanding its gas and dry bulk fleet, by adding more than 25 vessels within the next five years.
This will enable ADNOC to sell more of its commodities on a ‘delivered basis’, increasing its global reach, unlocking new market opportunities and stretching the value of its supply chain.
During the visit to Port Khalifa, H.H. Sheikh Theyab inaugurated the latest addition to ADNOC L&S’s shipping fleet. The acquisition of the 2850 TEU large feeder vessel, Al Reem 1, brings ADNOC L&S’s fleet to 123 vessels.
H.H. Sheikh Theyab said ADNOC has the unwavering support of the UAE’s leadership. He praised the contribution of ADNOC to the country’s economy and prosperity, saying it plays a central role in helping the leadership’s ambitious social and economic development objectives.
He commended ADNOC’s unwavering focus on its strategic growth goals, while driving operational efficiencies and enhancing its performance across the full hydrocarbons value chain.
ADNOC L&S was formed in late 2016 from three ADNOC subsidiaries, ADNATCO, IRSHAD and ESNAAD.
The integration created synergies between shipping, marine services, offshore logistics and onshore services, thereby enhancing organizational capabilities.
Following the integration, ADNOC L&S has successfully increased revenue by 34 per cent. Overall, the company’s net operating profit has risen 220 per cent since the integration.
ADNOC L&S’s overall business model creates value through four major activities.
ADNOC L&S will play a critical role in supporting the delivery of ADNOC’s 2030 smart growth strategy, through which ADNOC will increase its oil production capacity to 4 million barrels per day (mmbpd) by the end of 2020 and 5mmbpd by 2030.
In the Downstream, ADNOC intends to triple production of petrochemicals to 14.4 million tons per annum and double its crude refining capacity by 2025.
This ambitious growth plan, combined with ADNOC’s move into trading, presents significant opportunities for ADNOC L&S.
H.H also witnessed the signing of a Memorandum of Understanding between ADNOC L&S and China’s Wanhua Petrochemical to explore the creation of a joint venture to pave the way for the transport of greater gas volumes in line with market demand.
Wanhua Petrochemical is an existing customer of ADNOC, having signed 10-year LPG purchase contract for 1MMPTA.