ADNOC L&S eyes new LNG carrier additions and buys shipping player with 32-tanker fleet

ADNOC’s shipping and maritime logistics arm, ADNOC Logistics and Services (ADNOC L&S), has signed a letter of intent (LoI) for the construction of multiple liquified natural gas (LNG) carriers with South Korea’s shipbuilder. The firm is also boosting its fleet with 32 tankers by acquiring a Singaporean shipping company.

The UAE logistics player reported signing a deal for a minimum of three 174,000-cubic meter LNG carriers with South Korea’s Hanwha Ocean, with options for at least two additional ones. While the value remains unknown, it was revealed that the delivery is scheduled for 2028.

This follows the UAE President’s state visit to the Republic of Korea on May 29, when it was disclosed that ADNOC L&S signed LoIs with Samsung Heavy Industries and Hanwha Ocean to construct up to ten new LNG carriers.

Meanwhile, ADNOC L&S also inked a deal to acquire Navig8, a Singaporean shipping company active on five continents. As the shipping player, which reported an EBITDA close to $400 million in 2023, owns a fleet of 32 tankers, the UAE player expects the transaction to result in new growth opportunities and higher returns, as well as expand its blue-chip customer base.

Under the terms of the agreement, which is subject to customary regulatory approvals, ADNOC L&S is set to acquire 80% of the Navig8 for $1.04 billion effective from January 1, 2024. The remaining 20% will be acquired in 2027 for a deferred consideration of $335 million to $450 million. The acquisition is anticipated to be immediately value accretive.

Captain Abdulkareem Al Masabi, CEO of ADNOC L&S, noted: “This value accretive acquisition marks another major milestone as we deliver on our transformational growth strategy. The addition of Navig8’s presence in 15 international cities, fleet of tankers and world-class services will expand our geographical footprint and service offering, cementing our position as a leading global energy maritime logistics and services company.”

Navig8’s management team is set to stay on and maintain its current operations under the existing brand after the transaction is completed to ensure continued performance together with its new partner.

Navig8 CEO, Nicolas Busch, pointed out: “The opportunity to work collaboratively with ADNOC L&S and the wider ADNOC Group brings together their extensive knowledge of energy markets with Navig8’s unique presence in the maritime sector. This will allow us to enhance the service and value we deliver to both our customers and the Navig8 group. We are very proud to support ADNOC L&S as they increase their global footprint.”

The Singaporean player recently inked a six-tanker deal with China’s New Times Shipbuilding (NTS), receiving the second MR tanker with emission-reducing technologies in April, three months after the delivery of the first one.

ADNOC has recently been making lower-carbon LNG investments in a bid to up its energy transition game. In addition to purchasing an interest in Eni’s Coral Sul floating LNG (FLNG) offshore facility in Mozambique, the oil and gas major inked agreements for LNG offtake and an equity position in the Rio Grande LNG (RGLNG) export project in Texas.