Adnoc Logistics & Services (Adnoc L&S) has formally announced the formation of a joint venture with China’s Wanhua Chemical Group that will be engaged in shipping LPG and petroleum products.
Last month, TradeWinds reported the joint venture, AW Shipping, placed a $365m newbuilding order for three LPG-fuelled VLGCs at Jiangnan Shipyard with options for two more.
The firm 86,000-cbm vessels are due for delivery in the second half of 2022.
In a statement issued on Tuesday, the shipping arm of Abu Dhabi National Oil Co (Adnoc) said the joint venture will own and operate VLGCs and modern product tankers.
“The JV further solidifies Adnoc L&S’ position as the largest, fully integrated logistics and shipping company in the United Arab Emirates and paves the way for the transport of greater LPG volumes to China, in line with market demand,” said UAE minister of industry and advanced technology Sultan Ahmed Al Jaber.
Incorporated in Abu Dhabi, AW Shipping will be responsible for transporting LPG and other products sourced from Adnoc and other suppliers to Wanhua’s production based at home and abroad, according to the statement.
“The establishment of AW Shipping supports Adnoc’s smart growth and value creation strategy and is another example of how Adnoc is stretching the margin from every molecule that we produce, refine, ship and sell, while also forging stronger partnerships in key growth markets,” added Al Jaber, who is also Adnoc’s group CEO.
In 2018, Adnoc secured a contract to supply Wanhua 1m tonnes of LPG per annum for 10 years in a deal estimated to be worth up to $12bn.
Adnoc L&S in 2019 signed a memorandum of understanding with Wanhua to explore the creation of a joint venture for gas shipping, paving the way for AW Shipping.
“The new company will strengthen the strategic cooperation between Adnoc and Wanhua and will also ensure the stable supply of LPG cargoes and other petroleum products for Wanhua system," Wanhua chairman Liao Zengtai said.
With plants in China and Hungary, Wanhua is one of the world's leading producers of methylene diphenyl diisocyanate.
The Adnoc L&S statement did not mention the newbuilding order at Jiangnan. TradeWinds has approached the company for further comment.
