ADNOC studying LNG bunkering start-up in UAE's Fujairah or Jebel Ali

Abu Dhabi National Oil Co.'s shipping arm is studying whether to back an LNG bunkering operation in the UAE to serve as a fueling station for its new LNG-fueled ships on order.

Fujairah on the UAE's east coast and Jebel Ali in Dubai are being considered for the LNG bunkering operation, Samuel Lazar, manager, technical (gas), ship management, at ADNOC Logistics & Services, told S&P Global Platts Dec. 15. ADNOC L&S's fleet currently includes dual fuel capacity, while the new orders will use only LNG, he said. But there are no options in the region for LNG bunkering.

ADNOC is already present in Fujairah with crude storage capacity, and its benchmark Murban crude is the basis for a new futures contract that started trading in March on the ICE Futures Abu Dhabi exchange. Fujairah is a delivery option for the contract. Murban accounts for nearly half of ADNOC's production capacity.

ADNOC for the last two years has been looking for a solution to serve the new LNG-fueled vessels, including VLGCs and VLCCs, Lazar told the Seatrade Maritime Middle East conference at Expo 2020 in Dubai.

"We started to visit our neighbors in the region and asked them what are their plans for their maritime sector and we did realize there is potential for an entirely new business activity, which we are currently pursuing," he said. Even cruise ship owners are "very excited about this and have now placed orders" for LNG-fueled vessels to use a Middle East port for LNG fuel, he said

ADNOC said earlier this year it was expanding its shipping fleet to support its newly established trading business and its plans to boost oil production capacity by 25% to 5 million b/d by 2030. It announced in February six new vessels, the first crude carriers to join the ADNOC L&S fleet, which can carry a total of 12 million barrels. It also said it ordered five newbuild and one recent second-hand dual fuel VLGC for AW Shipping, its joint venture with Wanhua Chemical Group and purchased four bulk carriers.

ADNOC L&G grew its fleet with 16 deep-sea vessels in 2020.