ADNOC L&S adds four LNG carriers

ADNOC Logistics and Services has ordered four next-generation liquefied natural gas carriers for about $900 million, expanding its shipping capacity as Abu Dhabi seeks a larger role in global gas supply and trading.

The vessels, each capable of carrying 175,000 cubic metres of LNG, will be built at Jiangnan Shipyard in Shanghai and delivered in 2029. The contract raises the company’s LNG newbuild programme to 18 vessels and deepens its long-standing shipbuilding partnership with China.

The Abu Dhabi-listed company expects the ships to operate under long-term charter agreements, providing predictable revenue while supporting the movement of LNG from expanding production centres to high-growth markets. Their combined carrying capacity will reach 700,000 cubic metres.

ADNOC L&S chief executive Captain Abdulkareem Al Masabi said the order reflected confidence in the long-term fundamentals of LNG shipping, as natural gas demand rises and trade routes become more diverse. He said the company was investing in an efficient fleet capable of connecting supply sources with major consumption centres.

The contract was signed during a ceremony in Shanghai attended by ADNOC managing director and group chief executive Dr Sultan Ahmed Al Jaber, senior UAE officials and executives from China State Shipbuilding Corporation, Jiangnan Shipyard and Wanhua Chemical Group.

Jiangnan Shipyard chief executive Xiao Wenlin signed the agreement with Al Masabi. The yard has already constructed a series of specialised gas carriers for ADNOC L&S and its joint ventures, including LNG, ethane, ammonia and liquefied petroleum gas vessels.

ADNOC L&S has taken delivery of six 175,000-cubic-metre LNG carriers from Jiangnan under an earlier $1.2 billion programme. Five have entered contracts with ADNOC Gas lasting as long as 15 years, generating stable income since May.

The additional order forms part of a broader expansion designed to match ADNOC’s growing LNG portfolio. Eight more carriers, involving investment of about $2.5 billion, are under construction at Samsung Heavy Industries and Hanwha Ocean in South Korea. Deliveries are due to begin in 2028.

All eight vessels have been assigned to 20-year time charters with ADNOC Gas, supporting the planned increase in exports from the Ruwais LNG development. The project is designed to produce 9.6 million tonnes a year and is expected to more than double the UAE’s LNG production capacity to about 15 million tonnes annually.

Ruwais LNG is scheduled to start deliveries in 2028. Its liquefaction trains will use electric motors powered by lower-carbon electricity, reducing operating emissions compared with conventional gas-driven facilities. Long-term supply commitments have already been secured with buyers in Europe and Asia.

The fleet investment also supports ADNOC’s new global LNG marketing and trading platform, which combines commercial operations from ADNOC Gas, international investment arm XRG and ADNOC Trading. Based in Abu Dhabi Global Market, the business is targeting 47 million tonnes a year of marketable LNG by 2035.

That target includes production and supply positions across the UAE and international markets. XRG has been expanding its exposure to gas infrastructure and LNG projects, including investments in the United States, as ADNOC seeks to build a portfolio capable of serving customers across multiple regions.

The wider strategy reflects expectations that LNG demand will grow as Asian economies expand, electricity consumption rises and countries replace coal with gas. Demand from data centres and artificial intelligence infrastructure is also driving forecasts for higher power generation requirements, particularly in the United States.

However, the expansion comes as the global LNG shipping market prepares for a wave of vessel deliveries. Shipowners are balancing expectations of rising cargo volumes against the risk of temporary oversupply, especially if new liquefaction projects are delayed.

ADNOC L&S is limiting part of that exposure by placing vessels on long-duration contracts before delivery. The approach offers earnings visibility and reduces dependence on volatile spot charter rates, while retaining selected market exposure through other parts of its fleet.

Including its 50 per cent interest in the AW Shipping joint venture with Wanhua Chemical, ADNOC L&S has committed more than $5 billion to 32 vessels since 2022. Nine have been delivered, while 23 are scheduled to join the fleet by 2029.