Staff Report
Dubai, UAE
ADNOC Logistics and Services, a subsidiary of Abu Dhabi National Oil Company (ADNOC), said, it won a $975 million (Dh3.57 billion) Engineering, Procurement and Construction (EPC) contract from its sister concern ADNOC Offshore, to build an artificial island in the Lower Zakum offshore field.
According to ADNOC L&S, at least 75 percent of the total contract value for dredging, land reclamation and marine construction of the island will flow back into the UAE economy, ADNOC L&S said in a regulatory filing to the Abu Dhabi Securities Exchange on Thursday.
The provision of Engineering, Procurement and Construction (EPC) services in the integrated logistics business is a new offering by ADNOC L&S in line with its announced strategy to achieve significant ongoing growth, including expansion into new verticals. The EPC market is expected to experience substantial growth in the region in the coming years. The company aims to offer a broader range of services to its customers while facilitating the growth of ADNOC’s upstream and downstream operations.
This is the first major award for ADNOC L&S after it listed on the Abu Dhabi Securities Exchange (ADX) on 1 June 2023 following the highest demand globally for an IPO this year.
Captain Abdulkareem Al Masabi, Chief Executive Officer of ADNOC L&S, said: “Capitalising on our project management expertise, end-to-end logistics solutions, and strategic partnerships, ADNOC L&S is primed to execute major offshore EPC contracts that support our customers’ ambitious growth plans and deliver value to our shareholders.”
“This contract award for the construction of artificial island ‘G’ exemplifies our strategy to tap into new growth areas, showcasing the expanding range of services we offer to our customers and the trust that ADNOC Offshore has placed in us as their partner of choice,” said Al Masabi.
This is the maritime logistics company’s first major contract after being listed on the ADX last week. The company has most diversified fleet in the Middle East, owing 245 vessels and approximately 540 vessels operated and chartered annually, combined with its 1.5 million square meter logistics base in Abu Dhabi and integrated logistics capabilities, ADNOC L&S is the region’s largest shipping and integrated logistics companies.
The new Lower Zakum award sets up the perfect foundation for ADNOC L&S – more known for its shipping fleet – to emerge as a serious contender in the lucrative EPC space.
ADNOC L&S is targeting an average annual Earnings Before Interest, Tax, Debt and Amortisation (EBITDA) growth in the ‘low teens over the medium term’. The growth will come from new contract awards, further expansion of the integrated logistics services platform, and optimized redeployment of jack-up barges.
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