UAE’s energy giant Adnoc has selected two South Korean shipbuilders to build six liquefied natural gas (LNG) carriers following a tender.
LNG Prime was the first to report in January this year, citing shipbuilding sources, that Adnoc had launched the tender inviting offers from yards in China and South Korea for six firm plus four optional standard-size LNG carrier newbuilds.
The LNG carriers are expected to serve Adnoc’s second LNG terminal in Al Ruwais.
Sources said on Wednesday that Adnoc has selected Samsung Heavy Industries and Hanwha Ocean, previously known as DSME, to build the LNG carriers.
The yards will each build three LNG carriers with two optional vessels, the sources said.
Several reports in South Korea said on Wednesday that Adnoc has signed letters of intent with SHI and Hanwha Ocean to build at least six LNG carriers worth about $1.5 billion.
South Korea and the UAE signed a bilateral trade agreement on Wednesday and the LOI was signed at the presidential office in Seoul.
Adnoc L&S says deal involves at least 10 LNG carriers
Adnoc Logistics & Services confirmed in two separate announcements later on Wednesday it has signed letters of intent with the two shipbuilders to construct at least 10 newbuild LNG carriers.
The firm said that SHI will build at least three LNG carriers with options for at least two additional LNG carriers, while Hanwha Ocean will also build at least three LNG carriers with options for at least two additional LNG carriers.
Each LNG carrier has a capacity of 174,000 cbm and all of the vessels will be scheduled for delivery in 2028.
Adnoc L&S did not provide the price tag of the deal.
Currently, LNG carriers with a capacity of 174,000 cbm in South Korea are worth about $265-$270 million.
Adnoc L&S is already working to renew its fleet of LNG carriers and it has six 175,000-cbm vessels on order at China’s Jiangnan Shipyard worth more than $1.2 billion.
The firm is expected to take delivery of the first vessel in this batch in December this year and the rest of the ships in 2025 and 2026.
These “LNG Jumbo” dual-fuel carriers feature GTT’s Mark III Flex membrane system and a partial reliquefaction system.
Adnoc’s LNG expansion
Adnoc L&S’s existing fleet of Moss-type, steam turbine LNG carriers serves Adnoc’s 6 mtpa LNG terminal on Das Island.
Last year, state-owned Adnoc announced it will build its second LNG terminal in Al Ruwais.
The firm previously planned to construct the facility in Fujairah and is yet to take a final investment decision on the project.
When completed in 2028, the project, which consists of two 4.8 mtpa LNG liquefaction trains with a total capacity of 9.6 mtpa, will more than double Adnoc’s LNG production capacity.
Earlier this month, Adnoc signed a heads of agreement with Germany’s EnBW to supply the latter with LNG from its planned LNG terminal in Al Ruwais.
This is the third long-term LNG supply agreement from the Ruwais LNG project, following the 15-year agreement with Germany’s SEFE singed in March this year and the 15-year agreement with China’s ENN Natural Gas signed in December 2023.
Besides the Ruwais LNG plant, Adnoc announced two international LNG investments this month.
Adnoc will buy an 11.7 percent stake in the first phase of NextDecade’s Rio Grande LNG export terminal in Texas from Global Infrastructure Partners.
Adnoc and NextDecade also entered into a 20-year LNG offtake agreement for the fourth Rio Grande LNG train.
The firm has also agreed to buy Galp’s 10 percent interest in the Area 4 concession of the Rovuma basin in Mozambique, which includes Eni’s Coral South FLNG project.
(Updated with statements by Adnoc L&S.)