UAE-based ADNOC Logistics & Services signed a Memorandum of Understanding (MoU) with 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.
The MoU signing was realized on the occasion of the visit of HH. 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, to Abu Dhabi’s Khalifa Port.
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, enabled by its shipping arm ADNOC L&S.
ADNOC L&S 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.
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%. Overall, the company’s net operating profit has risen 220% since the integration.
ADNOC L&S aims to 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.