ADNOC L&S CFO details growth strategy amid market complexities

Speaking at the 16th Marine Money London Ship Finance Forum, Mr Gleeson detailed the company’s substantial LNG carrier programme and recent strategic acquisitions while offering a sobering assessment of current maritime security challenges.

In detailed remarks across two panel sessions, Mr Gleeson revealed the company’s carefully calibrated approach to fleet growth, emphasising its substantial LNG carrier programme. Six vessels were contracted in 2023, with four operating under 15-year agreements and one under a 7-year contract. In 2024, the company entered a new and distinct phase of growth. This saw it secure an impressive 340 vessel-years of contracted activity through a strategically planned orderbook, which includes eight additional LNG carriers and nine VLECs. All these vessels are set to operate under 20-year contracts, ensuring stable and reliable long-term revenue streams.

"Among the LNG carrier fleet currently under construction (with one delivered in November 2024), eight vessels are contracted for 20 years, four for 15 years, and one for 7 years," Mr Gleeson explained, emphasising these contracts are "delivering really strong returns." This steady accumulation of long-term contracted revenue highlights ADNOC L&S’s commitment to sustainable growth over speculative expansion.

The CFO provided particular insight into the company’s recent Navig8 acquisition, revealing it as part of a deliberately paced internationalisation strategy rather than an opportunistic purchase. "We were running a large and growing deepsea fleet from a single office in Abu Dhabi and we knew we needed to be global," he explained, highlighting specific interest in commercial pooling arrangements for both risk management and analytics capabilities.

On the critical issue of sustainability, Mr Gleeson announced ADNOC L&S has advanced its net-zero targets to 2045, while maintaining a pragmatic approach focused on immediate efficiency gains. He emphasised traditional optimisation methods are currently delivering the strongest returns, citing the company’s integrated logistics improvements which have significantly reduced vessel requirements while maintaining cargo volumes.

The company maintains a notably conservative financial approach post-IPO, operating at slightly above zero net debt to EBITDA after a period of negative leverage. Its first post-listing financing was structured as a hybrid capital instrument, which Mr Gleeson characterised as equity financing, enabling the maintenance of low net debt ratios while providing capacity for strategic growth initiatives.

Addressing current market disruptions, particularly in the Red Sea, Mr Gleeson provided a measured assessment, distinguishing between immediate safety concerns and longer-term market confidence. "Opening up in terms of ‘is it safe today to transit?’, or opening up in terms of ‘does everyone feel safe enough to transit?’ - those are two very different things," he noted, pointing to deep-rooted regional political tensions that suggest a protracted resolution timeline.

The company maintains "a very close watch on the security situation" with external intelligence updates, evaluating transit risks on a case-by-case basis. Mr Gleeson noted " very little transit east to west," expecting this pattern to persist "for quite some time," reflecting a cautious approach to risk management while maintaining operational flexibility.