His Highness Sheikh Theyab bin Mohamed bin Zayed Al Nahyan, a member of Abu Dhabiís Executive Council and Supreme Petroleum Council and Chairman of the Abu Dhabi Department of Transport was updated on ADNOC Logistics & Servicesí (ADNOC L&S) strategic growth plans, which will transform it into a global shipping champion, during a recent visit to Abu Dhabiís Khalifa Port. ADNOC L&S is the maritime and logistics arm of the Abu Dhabi National Oil Company (ADNOC).
During the visit, H.H. Sheikh Theyab heard how ADNOCís 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 Ďdelivered basisí, increasing its global reach, unlocking new market opportunities and stretching the value of its supply chain.
H.H. Sheikh Theyab said ADNOC has the unwavering support of the UAEís leadership. He praised the contribution of ADNOC to the countryís economy and prosperity, saying it plays a central role in helping the leadershipís ambitious social and economic development objectives. He commended ADNOCís unwavering focus on its strategic growth goals, while driving operational efficiencies and enhancing its performance across the full hydrocarbons value chain.
H.H. Sheikh Theyab was received by His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC CEO and Captain Abdulkareem Al Masabi, ADNOC L&S CEO and key personnel from the 3,400-strong organization. Also present were prominent leaders from the UAEís energy and maritime sector.
H.E. Dr Al Jaber said: ďIt was an honor to welcome His Highness Sheikh Theyab to Khalifa Port and to inform him of our plans to create greater value from our ADNOC L&S assets and operations. We have set out a clear growth strategy for ADNOC L&S and defined our intent to meet the Groupís present and future shipping and marine services requirements. At the same time, there will be a focus on ADNOCís trading ambitions, which foresee a significant growth in the delivery of products to our global customers.
ďADNOC Logistics & Services is a crucial link in the ADNOC supply chain, delivering oil, gas and petroleum products to our customers across the world. As we grow our trading business and strengthen our integrated maritime capabilities, we will capitalize on market growth opportunities and position the company as the largest regional integrated maritime services company.Ē
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 per cent. Overall, the companyís net operating profit has risen 220 per cent since the integration.
ADNOC L&Sís overall business model creates value through four major activities: firstly, shipping activities, either with its own vessels or via chartering, which includes crude and refined products, dry bulk, and LNG transport. Secondly, marine services activities, which comprise petroleum ports operations, diving and oil spill response. Thirdly, offshore logistics activities that include offshore support vessels and an integrated logistics base. Fourthly, onshore activities which consist of a marine passenger terminal and a container terminal.
ADNOC L&S will play a critical role in supporting the delivery of ADNOCís 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. This ambitious growth plan, combined with ADNOCís move into trading, presents significant opportunities for ADNOC L&S.
During the visit to Port Khalifa, H.H. Sheikh Theyab inaugurated the latest addition to ADNOC L&Sís shipping fleet. The acquisition of the 2850 TEU large feeder vessel, Al Reem 1, brings ADNOC L&Sís fleet to 123 vessels.
H.H also witnessed the signing of a Memorandum of Understanding between ADNOC L&S and Chinaís 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.