AW Shipping, a joint venture of ADNOC Logistics and Services and Wanhua Chemical Group, has awarded shipbuilding contracts to Jiangnan Shipyard in China for nine Very Large Ethane Carriers (VLECs) two Very Large Ammonia Carriers (VLACs), which will be among the world’s largest ethane and ammonia carriers.
The total contract is valued at approximately $1.9 billion. The nine VLECs are priced at approximately $1.4 billion, and the two VLACs are priced at approximately $250 million. There is also an option for adding another two VLACs at the same price.
The new vessels will run on energy-efficient dual-fuel engines. The VLECs will be deployed on 20 years’ time charter contracts, generating revenue of $4 billion (AED14.7 billion) through 180 years of aggregated contract coverage.
Captain Abdulkareem Al Masabi, Chairman of AW Shipping and CEO of ADNOC L&S, commented: “This new order by AW Shipping reinforces ADNOC L&S’ ongoing fleet expansion and will bolster our ability to transport lower-carbon energy sources and support the energy transition. Importantly, the vessels will generate substantial revenue streams for ADNOC L&S, underscoring our commitment to value-accretive strategic investments as we serve our customers.”
Currently, there are more than 25 VLECs in operation with different shipping companies around the world. Upon receiving the nine new vessels, AW Shipping will own one of the world’s largest fleets of VLECs.
The contracts were signed in Beijing at a ceremony witnessed by Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO.
The AW Shipping JV was established in 2020 to grow ADNOC L&S’ global operations and strengthen the industrial relationship between the UAE and China. This latest order aligns with ADNOC L&S’ vision to deploy more than $5 billion in value accretive investments following its listing on the Abu Dhabi Securities Exchange (ADX) in June last year.
Kou Guangwu, President & CEO of Wanhua Chemical Group, added: “We are extremely happy to place new VLECs and VLACs shipbuilding orders to Chinese Jiangnan Shipyard together with our strategic partner ADNOC L&S through our AW Shipping joint venture, which is a firm recognition of high-end Chinese equipment manufacturing capability and creates a solid foundation to further deepen the strategic cooperation between Wanhua and ADNOC L&S.”
The VLECs have a carrying capacity of 99,000 cubic meters each and can be powered by ethane or conventional fuels. They are scheduled for delivery between 2025-2027. The VLACs have a carrying capacity of 93,000 cubic meters each for ammonia and can be powered by liquefied petroleum gas (LPG) or conventional fuels. They are scheduled for delivery between 2026-2028.
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