Adnoc's logistics and services arm to boost fleet size over five years
The unit formed after the merger of three subsidiaries in 2016 has signed an MoU with a Chinese petchems buyer
Abu Dhabi National Oil Company's logistics and services subsidiary and China's Wanhua Petrochemical have signed a memorandum of understanding to create a joint venture to transport greater volumes of gas as it looks to increase its fleet size.
Adnoc Logistics and Services, which was formed in 2016 after the merger of three subsidiaries, will acquire its first crude oil tankers, expand its gas and dry bulk fleet by adding more than 25 vessels over the next five years, the company said.
"As we grow our trading business and strengthen our integrated maritime capabilities, we will capitalise on market growth opportunities and position the company as the largest regional integrated maritime services company," said Adnoc group chief executive Dr Sultan Al Jaber.
The Abu Dhabi state firm's logistics and services arm increased revenue by 34 per cent since 2016 following the integration of subsidiaries Adnatco, Irshad and Esnaad. The company's net operating profit had risen 220 per cent in the same period.
Adnoc Logistics and Services covers a broad range of shipping, marine services, offshore logistics and onshore activities, which consist of a marine passenger and a container terminal.
In November, Adnoc signed an agreement with Wanhua Petrochemical to supply up to 1 million metric tonnes a year of liquefied petroleum gas (LPG) over 10 years.
LPG, a refined product, is in high demand in Asia, mainly as a cooking fuel stored in cylinders for stoves, as well as a propellant, refrigerant, vehicle fuel and as a feedstock for the petrochemicals industry.
National oil companies such as Adnoc have started negotiating and signing long-term contracts for products with buyers in East Asia as they look to secure market share and pivot business strategies to focus more downstream.
Adnoc currently produces 10.5 million tonnes of LPG per year. The firm is expanding its refining and chemical capabilities through investments of up to $45 billion with partners over the next five years, including plans to build the world's largest integrated refinery by 2025.
Updated: February 20, 2019 05:31 PM