4 ships worth 3.5 billion yuan! Jiangnan Shipbuilding wins the first VLAC order from China's shipbuilding industry this year

ADNOC L&S, the largest shipowner in the Middle East, has launched its largest new shipbuilding plan since its establishment. As its most favored shipyard, Jiangnan Shipbuilding has won its first order and achieved a breakthrough in China's VLAC construction industry this year.

According to trade news, ADNOC Logistics&Services (ADNOC L&S), a subsidiary of Abu Dhabi National Oil Company (ADNOC), has placed an order for the construction of 2+2 ultra large liquid ammonia transport ships (VLACs) with a capacity of 93000 cubic meters in Jiangnan Shipbuilding through its joint venture AW Shipping with Wanhua Chemical.

This batch of VLACs will be equipped with B-type cargo tanks, with a cost of approximately $120 million per vessel. After the confirmation of alternative orders takes effect, the total contract value will reach $480 million (approximately RMB 3.465 billion). The first two ships will be delivered in 2026, and it is said that Jiangnan Shipbuilding has managed to squeeze out an earlier delivery time for these two ships.

If the news is true, this will be the first VLAC order undertaken by a Chinese shipyard this year, breaking the "monopoly" position of the South Korean shipbuilding industry in the VLAC construction field this year.

It is understood that VLAC has become a hot topic in the new shipbuilding market this year. According to Clarkson data, the number of new ship orders for VLAC has reached 24 this year, exceeding 21 for the entire year last year. However, all these 24 new ship orders are taken over by the three major shipping companies in South Korea. Among the existing 45 handheld orders for this ship type, only 6 were taken over by Jiangnan Shipbuilding last year, while the remaining 39 are being built by the three major South Korean shipping companies.

At the same time, this order will also mark ADNOC L&S's first entry into the VLAC market. It is understood that ADNOC L&S announced at the beginning of this year that it will order a new batch of liquefied gas ships. At that time, it was reported that the company plans to order 6+4 175000 square meter LNG ships and 4 VLACs, and is currently inquiring with Chinese and Korean shipyards. This is ADNOC L&S's largest liquefied gas ship ordering program since its establishment.

ADNOC is a state-owned oil company in the United Arab Emirates, founded in 1971. In terms of oil production, it is the largest and 12th largest oil company in the UAE and the world. Its product chain covers almost all fields and varieties of oil, natural gas, and petrochemicals. At the end of 2016, ADNOC integrated three subsidiaries, ADNATCO, IRSHAD, and ESNAAD, to create ADNOC L&S, providing oil, natural gas, and oil derivative products to global customers. It owns and operates the largest transportation fleet in the United Arab Emirates.

In 2019, ADNOC L&S launched a fleet expansion plan with the goal of adding more than 25 ships over the next 5 years, acquiring the first batch of crude oil ships and expanding the liquefied gas and dry bulk carrier fleets to complement ADNOC's 2030 intelligent growth strategy. According to official website data, the current fleet size of ADNOC L&S shipping business exceeds 600 ships, including liquefied gas carriers, oil tankers, and bulk carriers, with 57 self owned ships.

Jiangnan Shipbuilding plays an important role in the expansion of ADNOC L&S fleet, and the cooperation between the two sides began in 2020. At that time, AW Shipping, a joint venture company of ADNOC L&S, placed an order with Jiangnan Shipbuilding to build 5 86000 cubic meters of dual fuel VLGC. These new ships were delivered gradually in 2022 and 2023.

In 2022, ADNOC L&S successively ordered up to 6 175000 square meter Mark III Flex LNG transport ships at Jiangnan Shipbuilding. This is the first time that a Chinese shipyard has taken on an order for a MARK III thin-film large LNG ship, and also the first order for China in the field of large LNG ships aimed at the pure international market. It marks the beginning of direct cooperation between Chinese shipyards and international leading oil and gas companies in the field of large LNG ship construction.

With the orders from ADNOC L&S, Jiangnan Shipbuilding was able to officially enter the market for large-scale LNG ship construction, laying a solid foundation for forming a stable LNG ship construction capacity, helping to expand and improve the proportion of high value-added ship types, and further enhancing comprehensive competitiveness.

In addition, Jiangnan Shipbuilding is also the world's "strongest shipyard" in the field of ultra large liquefied gas carriers (VLGCs), and has long been a world leader in the global VLGC and its derivative VLEC (ultra large ethane transport ships) market, with orders held ranking first in the world. Last year, Jiangnan Shipbuilding received the world's first VLAC order of 93000 cubic meters, becoming the first and only shipyard in China to build VLAC.

It is understood that Jiangnan Shipbuilding's 93000 cubic meter VLAC is a derivative of its independently developed and designed fourth generation VLGC boutique ship type (Panda 93A). It is not only the preferred ship type for long-distance transportation of green ammonia, but also capable of fully loading liquefied petroleum gases such as propane and butane. This type of ship has a total length of 230.0 meters, a width of 36.6 meters, a depth of 22.5 meters, a structural draft of 13.0 meters, and is classified by Lloyd's Register of Shipping in the United Kingdom. In the design of this type of ship, special emphasis was placed on the tank design, taking into account the higher density of anhydrous liquid ammonia compared to conventional liquefied petroleum gas. At the same time, a completely independent and self-developed new generation of low resistance line type was adopted, which enables it to have excellent and balanced performance under full load, ballast, and different densities of liquid cargo loading conditions.

According to Clarkson's data, Jiangnan Shipbuilding currently holds a total of 77 orders of 6.68 million deadweight tons, including 31 ultra large ethane transport ships (VLECs), 3 VLGs, and 6 VLACs, as well as 22 container ships, 8 LNG ships, and 7 automobile transport ships, with delivery dates scheduled until 2027.