![COLUMN | Updates on offshore wind orders from Cyan, Havfram, Edda Wind, North Star Shipping etc. Also news on Heroic Idun ̶s̶h̶a̶k̶e̶d̶o̶w̶n̶ restitution [Offshore Accounts]](http://media.assettype.com/bairdmaritime%2Fimport%2Fwp-content%2Fuploads%2FMy-project-11.jpg?w=480&auto=format%2Ccompress&fit=max)
The money is still pouring into new wind vessels, even as the wider orderbook for new vessels to work in offshore oil and gas remains at zero, and has been for the best part of a decade. Let's look at the latest developments in wind, still the hottest sector for offshore newbuilds.
In the depths of the oil industry recession in 2016, with dozens of drillships laid up around the world, and more abandoned unfinished at shipyards, their contracts cancelled by financially stressed owners, a Barcelona-based company called Offshoretronic had a radically simple idea.
Why not convert and re-purpose these highly engineered drilling units for service in offshore wind installation, taking off the drilling derricks and installing cranes instead? With their powerful thrusters, solid dynamic positioning footprints, high-capacity diesel-electric power units, high stability and deep draughts, converting unloved drillships into wind turbine installation vessels (WTIVs) seemed a no-brainer to founder Jeroen Berkhout.
In 2020, Offshoretronic released conceptual design drawings for a dual crane WTIV capable of installing turbines of up to 11 MW. Then, in 2021, the company introduced a vessel design for the installation of the next-generation, ultra long XXL monopiles that will support wind turbines of up to 20 MW.
The first company to take the lead and actually repurpose a drillship was Boskalis, as we reported in 2020. Drydocks World in Dubai converted the former drillship GSF Jack Ryan to the wind turbine foundation installation vessel Bokalift 2. A 4,000-tonne crane capable of lifting structures more than 100 metres high was installed on the vessel in 2021, along with 9,000 tonnes of steel blocks fitted on both sides of the vessel to increase its stability and a new work deck with 7,500 square metres of free deck space.
Bokalift 2 was then contracted to work on the Changfang and Xidao offshore wind farm construction off Taiwan last year, transporting and installing 62 three-legged jacket foundations and the accompanying 186 pin piles. Bokalift 2 is currently undergoing modifications in the Netherlands before its scheduled work in the United States for Ørsted and Eversource. The ship will transport and install three substations and XXL monopiles for their South Fork Wind and Revolution Wind offshore wind projects. The concept has been well and truly proved in action.
Who might be well placed to move into the sector by converting drillships? Transocean has the largest fleet of cold stacked DP drillships in the world with eight such units, according to its most recent fleet status report.
Last month, the world's largest deepwater rig owner announced it had signed a "non-binding memorandum of understanding" with Eneti, the Lauro family's listed jackup WTIV operator. Through its Seajacks International subsidiary, Eneti says it has installed more than 500 wind turbine foundation components at wind farms including Akita and Noshiro (Japan), Meerwind (Germany), Veja Mate (Germany), and Moray East (Scotland).
The pair agreed to move towards forming a joint venture, subject to definitive agreements, that would provide for the conversion of at least two Transocean drillships into floating offshore wind foundation installation platforms. The press release said that the vessels, once converted, "would be capable of carrying and installing up to six 3,500-tonne, 12-metre diameter monopile foundations with state-of-the-art safety and efficiency."
Whilst deepwater drillship rates have surged above US$400,000 per day and appear likely to hit US$500,000 per day in the coming months, the costs of reactivating units that have been long laid up have also soared, and customers have shown a marked reluctance to front up with the US$100 million needed for the reactivations.
With Eneti having a market capitalisation of just over US$300 million and two expensive new jackup WTIVs on order in Korea, the company is capital constrained to expand. However, the news that its rival Cadeler had signed a contract with Ørsted for foundation installation in the North Sea in 2026 for the first of Cadeler's two new specialised US$345 million F-class jackup vessels, for use in the Hornsea Three project, has galvanised interest in foundation installation vessels.
With a US$4.5 billion market capitalisation and a bank of laid-up drillships that could be re-purposed for foundation work, Transocean brings the balance sheet and the hulls whilst Eneti brings the wind experience and the client relationships. Credit to Eneti boss Emanuele A. Lauro for this partnership. The pair look well placed to diversify into foundations together, which would also have the advantage of making Transocean a more attractive investment for investors focused on renewables and sustainability. Transocean has a reputation for financial ruthlessness and will likely need a strong business case to proceed with the transformation of its drillships for wind service.
A non-binding memorandum of understanding is not the same as actually starting the conversion and reactivation of a laid-up drillship like Ocean Rig Apollo or Deepwater Champion. Talk is cheap, whereas actually transforming a cold-stacked drillship is a long term and expensive proposition.
We highlighted last September how Singapore's private equity firm Seraya Partners had launched Cyan Renewables, and promptly appointed former POSH boss Lee Keng Lin as Chief Executive Officer of the company.
Cyan immediately stated that it aimed to buy, own, and operate US$1 billion in offshore wind vessels over the next three years, and then the company went quiet for a long time. Finally, on April 25, Cyan announced it had signed a letter of intent at COSCO Shipping Heavy Industry to build its first foundation installation vessel. The vessel will be designed by a Norwegian firm and will be equipped with a crane of at least 5,000 tonnes, with the design specifically optimised for efficient installation of the heaviest monopiles and tallest jackets. The designer stated the unit will "also have low emission capability, using a hybrid power system consisting of dual-fuel engines (methanol), shore power, and a battery energy storage system."
Of course, this is only a letter of intent, so it will be good to know when Cyan finally proceeds with the binding shipbuilding contract.
Whilst Cyan signed letters with COSCO, Norwegian player Havfram Wind announced last month that that it has exercised its option to build a second "state-of-the-art" WTIV at CIMC Raffles shipyard in China. The WTIV's design will be similar to the initial GustoMSC NG20000X jackup that the company currently has under construction at the same yard. Delivery of the unit will be in the fourth quarter of 2025.
Havfram said in its press release that the latest battery hybrid drive train technology will be incorporated into the ship to significantly reduce carbon emissions per installed megawatt of offshore wind capacity. Delivery is scheduled for late in the fourth quarter of 2025.
The NG20000X vessel has the capability of installing offshore wind turbines with a rotor diameter of more than 300 metres as well as XXL monopiles weighing up to 3,000 tonnes at water depths of up to 70 metres, the company said. The Hamfram WTIVs will be fitted with a crane with lifting capacity of 3,250 tonnes.
Havfram said it has signed a contract with Ørsted to install wind turbines at their Hornsea Three project, starting in autumn of 2026, whilst Vattenfall has appointed the company as preferred supplier for its Norfolk Projects, starting in the spring of 2027. Last month, Havfram also signed a preferred supplier agreement with RWE for turbine installation support for that company's Nordseecluster project, commencing in the summer of 2026.
Maersk Supply Service is also believed to be in the process of ordering a second WTIV for service in Europe.
Whilst the big players are ordering massive foundation vessels and WTIVs, Norway's Edda Wind announced that it had ordered another four newbuild commissioning service operation vessels (CSOVs) from Vard. The first two vessels, under construction at Vard's Norwegian yards, are scheduled to be delivered in the first quarter of 2025. The third and fourth units will be delivered later in 2025 and early 2026 from Vard's Vung Tau yard in Vietnam. Edda, backed by John Fredriksen as a cornerstone investor alongside Idan Ofer in its 2021 stock market listing, has also secured options for an additional four CSOVs with Vard. The company raised NOK1.2 billion (US$112 million) in a private placement to fund the equity required in the new ships.
With orders for these additional four newbuilds, Edda Wind will have the largest fleet of offshore wind service vessels, a total of 14 vessels (of which four vessels were in operation at the end of March, with three more to commence operation this year). The company also manages the John Fredriksen-owned subsea vessels Edda Sphynx and Edda Savannah, which are performing walk-to-work contracts in North Sea wind farms at present. You can read Edda's May 12 stock market results announcement here. The company made a small net loss of just under US$500,000 in the first three months of the year.
The new Edda Wind vessels will be built to a Vard design and will be prepared for zero-emission operations based on a Liquid Organic Hydrogen Carrier (LOHC) concept, in addition to being methanol-ready. Enova contribution will be material in achieving zero emission operations.
Last week, North Star Shipping in Scotland also added to the CSOV orderbook. The private equity-owned company announced that it has signed new contracts for the design and construction of two new CSOVs with Vard for delivery in the first half of 2025.
The new North Star ships are of a Vard design, and the company says that they feature new methanol-ready, hybrid-propulsion solutions. North Star had already placed four SOV newbuild orders with Vard in Vietnam for long-term charter on the world's largest offshore wind farm, Dogger Bank. The first three ships on what is widely believed within the industry to be a loss-leading contract (when the cost of capital is taken into consideration) will commence operations this year, ahead of schedule, with the final ship to be delivered in 2024. The hulls of the two CSOVs will be built at one of Vard's yards in Romania and then outfitted, commissioned, and delivered from one of the yards in Norway, the shipbuilder said.
Congratulations to Vard for winning so many new orders, and good luck to Edda Wind and North Star with placing these vessels on charter. This is a fiercely competitive segment, with uncontracted units already on order from Acta Marine, Pelagic Partners (See our coverage of the controversial background to the management of this Cyprus-based fund.), Integrated Wind Solutions with its six Skywalker-class of vessels from China, and Olympic of Norway. Only in January had Integrated Wind Solutions exercised two of its options with the China Merchants Group shipyard to bring its orderbook up to the half-dozen. James Fisher and Sons is also evaluating entry, and last week, the newbuild CSOV REM Power was named for REM-Purus at a ceremony in Aalesund, Norway (photos here).
It is a crowded space, but the hockey stick graph of wind turbine installations has a compelling, almost hypnotic attraction for shipowners and investors everywhere.
Maybe, just maybe, the detained crew of the tanker Heroic Idun will be permitted to fly home from Nigeria this week.
Followers of the long and sad case will know that in order for the 26 innocent foreign crew to be released by the bullying and incompetent Nigerian authorities and allowed to return to their friends and families, the owners and their insurers have had to jump through a number of hoops to placate the "hurt feelings" of the West African state's military.
Firstly, there was a plea bargain agreed at the end of April whereby the owners of the tanker, Idun Maritime, a subsidiary of Norway's Ray Car Carriers, pleaded guilty to a single maritime offence, that of entering sovereign Nigerian waters unlawfully. The owners agreed to pay a fine of NGN5 million (around US$11,000). Idun Maritime and Ray Car Carriers have always denied any wrongdoing by the crew, and the crewmembers have not been convicted of any crime in Nigeria. Instead, they have been used as human bargaining chips by the Nigerian authorities, as evidenced by events last week.
No sooner was the plea bargain agreed than the Nigerians began to backpedal on the release of the crew, forcing the flag state of the ship, the Marshall Islands, to once again lodge a case at the International Tribunal for the Law of the Sea in the Netherlands. This threat of another legal defeat on top of the one inflicted by Switzerland, not known as a great maritime power, on Nigeria over the release of the tanker San Padre Pio seemed to focus minds in Abuja.
The next phase of the resolution was an agreement that the owners must pay US$15 million to the federal government "as restitution to the country", a sovereign shakedown fine more worthy of a Mafia protection racket than serious country.
The Chief of Naval Staff, Vice Admiral Awwal Gambo, said the payment was, "a resilient indication that the Nigerian Navy, as the nation's maritime sentinel, will stop at nothing to ensure the domain is safer for sustainable development of the nation's blue economy", Vanguard newspaper reported last week. Yes, this case suggests that the Nigerian Navy will stop at nothing, including the illegal detention of 26 innocent seafarers and breaking international law.
It is not clear how this US$15 million of "restitution to the country" will be handled. The restitution of over a thousand Benin Bronzes by the guilt-ridden German government to the Nigerian authorities resulted in the valuable and historic sculptures being arbitrarily handed over in March by presidential decree to the ownership of a private Nigerian citizen, the former descendant of the head of the Benin Empire, rather than displayed in a public museum. Because… why?
Let's hope that the US$15 million paid out by Heroic Idun's owners as "restitution" will be spent wisely on important healthcare or educational projects rather than being squandered on corrupt procurement, or looted.
The last hoop to jump through to release the seafarers was completed late on Friday: a public apology in leading maritime publication Lloyds List, which you can read online here.
One might have thought that the Nigerian government should be the party to apologise for the mistreatment and unjust detention of the seafarers for over eight months. Twenty-six innocent seafarers, who, remember, have not been convicted of any crime. Twenty-six seafarers who have been subject to mental stress, physical confinement, and the threatening presence of armed guards.
But no, despite being awarded the Nigerian Grand Service Star and Distinguished Service Star, Vice Admiral Gambo wanted the owners of the ship to apologise to the same navy that had unlawfully detained Heroic Idun and its crew.
The owners, clearly under duress, "express their sincere regret for the difficulties presented to the navy and any embarrassment that may have resulted from this incident," but this just makes the embarrassment everyone outside Nigeria feels for the country's navy even worse.
Everyone knows the apology was obtained under duress, and that such forced apologies are the result of yet more bullying and coercion. It really does not reflect well on Nigeria's armed forces.
Note that this columnist won't be making any apologies to the Nigerian Navy. In fact, Vice Admiral Gambo should apologise to the international community forthwith, and make sure this never happens again to another ship and its crew (You might have thought that this would have been the response learned by the Nigerians losing the San Padre Pio case against Switzerland, but apparently not.). In fact, he should apologise to me personally, in writing, for wasting my time having to write about his childish shenanigans.
If the crew of Heroic Idun had been freed earlier, I could be writing about how President Muhammadu Buhari's request to convert US$53 billion of loans his government had taken unconstitutionally from the Nigerian central bank through a facility called the Ways and Means Advance had just been rubber-stamped by the senate earlier this month into a new 40-year bond paying a nine per cent interest rate.
I guess that US$15 million paid by the tanker's owner might be needed to service this epic new debt run up by the man dubbed "Nigeria's worst president" by the head of the Concerned Nigerians movement (here). The Financial Times reported last month how Nigeria spent over 90 per cent of last year's revenues simply servicing its existing debt, so another US$53 billion of debt will add yet more to the burden on the country's taxpayers.
If anyone deserves an apology, it is Nigeria's long-suffering people for putting up with such bad government for so long. Let's hope Bola Ahmed Tinubu, Nigeria's President-elect, can turn things around when he takes office on May 29.
Background reading
Visit the Offshoretronic website here.
Readers in Lagos may be interested to see the full might of the Nigerian Navy on display in Lagos Channel for a Presidential Review by outgoing President Muhammadu Buhari on Monday, May 22 (details here). We are waiting for our presidential VIP invite.
