INTERVIEW: ADNOC L&S sees 'integral' role for Integr8 in alternative bunker supplies

ADNOC Logistics and Services will aim to ramp up supplies of alternative marine fuels in the UAE and beyond via subsidiary Integr8 Fuels, which will play an essential part in decarbonizing the Middle East's bunker mix, CEO Abdulkareem al-Masabi said in an interview.

Integr8, one of the world's largest bunker traders with annual volumes of 5.6 million mt, became part of ADNOC L&S when its parent Navig8 was acquired by the shipping arm of Abu Dhabi National Oil Co. for over $1 billion in 2024.

The back-to-back supplier currently focuses on conventional, oil-based fuels but has started trading LNG and biofuels in Europe and Singapore, and Masabi told Platts, part of S&P Global Commodity Insights, that its offerings of alternative fuels would increase to meet demand from ADNOC's own fleet as well as external clients.

"Integr8 will play an integral part going forward [when we] look at alternate fuels," said Masabi. "Whether it be ammonia, biofuels and LNG ... All of these things are actually in the game plan for Integr8 going forward."

With 20 tankers from the ADNOC L&S fleet joining Navig8's pool operations at the beginning of this year, Masabi said Integr8 is supplying a growing proportion of its parent's fleet of over 330 owned and 600 chartered ships of various types.

With ADNOC's group net-zero target by 2045, ADNOC L&S has invested $6.25 billion in building a dual-fuel fleet of 10 ships in operation and 26 on order when LNG carriers are taken into account.

Masabi suggested Integr8's alternative fuel businesses could grow in line with ADNOC L&S' requirements and align with ADNOC's fuel production and trading operations, but details are still being ironed out.

"It's all about how we finish our strategy this year for the Navig8 business, for the Integr8 business, and then how we strategize and implement it," the CEO added.

Home turf

Several state-backed firms in the UAE, which has set a national goal to reach net-zero emission by 2050, have announced plans to significantly ramp up production of LNG and hydrogen and its derivatives like ammonia and methanol that can be used as marine fuels.

ADNOC, which currently operates the Das Island LNG plant with a liquefaction capacity of 6 million mt/year, expects to commission the 9.6 million mt/year Ruwais facility by 2028.

At the national level, the UAE is aiming to scale up clean hydrogen production to 1.4 million mt/year by 2032 and 15 million mt/year by 2050.

TA'ZIZ, a joint venture between ADNOC and Abu Dhabi's sovereign fund ADQ, has a 1 milion mt/year low-carbon ammonia production facility in Al Ruwais scheduled to start operations in 2027.

"From the UAE perspective, there's a big push basically in trying to decarbonize everywhere, including our maritime hubs," Masabi said. "We are pushing to set good standards in bunkering and to provide alternative bunker fuels within the UAE coastline."

Potential

Overall, the development of bunker supply hubs for alternative fuels in the Middle East has been slow despite multiple attempts by various companies.

Monjasa in May decided to suspend its regular LNG refueling services, the first of its kind in the Middle East, having bunkered cruise and containerships in Dubai's Port Rashid and Dubai Harbor and Abu Dhabi's Khalifa Port since January. The suspension resulted from LNG's high premiums against conventional fuels, according to the fuel trader.

April's average bunker price for very low sulfur fuel oil -- the prevalent bunker fuel -- was $456.80/mt compared with LNG at $598/mtVLSFOe, according to the Platts global bunker cost calculator. Other alternative fuels like bioblend B30 and bio-LNG were even more expensive.

At Fujairah, Middle East's largest bunkering port and the world's No. 3, several fuel traders -- including Vitol – have begun biofuel deliveries but overall liquidity for alternative fuels remains negligible.

Singapore, the world's largest bunker port, reported 2.4% of its 54.9 million mt of bunker sales in 2024 were from alternative fuels. The share was even higher in the world's No. 2, Rotterdam, at 12% of the Dutch port's 9.82 million mt sales.

Some industry participants said Fujairah may lack incentives to aggressively pursue a green transition due to its predominant status as Middle East's top oil trading hub. Masabi declined to comment on another emirate's policies, but said demand for alternative fuels should increase amid maritime decarbonization.

"The demand is there, and it's all about how we attract some good, reputable suppliers of LNG and biofuels," Masabi said.

More shipowners have invested in alternative propulsion technologies in recent years, while conventional ships need to burn more biofuels to stay compliant with tightening environmental regulations.

As of June 4, shipbroker Braemar estimates 1,320 ships capable of being fueled by alternative fuels or ready to do so following simple retrofits were in operation and 1,772 on order. More of them were LNG-capable ships, followed by methanol, but there is also a small but increasing number of ammonia-fueled ships being ordered.

"Maybe in the near future, we will see ammonia-fueled ships coming into play and hence we also need ammonia suppliers," Masabi said.