Leading dry bulk owner Scorpio Bulkers Inc. (NYSE: SALT) has signed a letter of intent (LOI) with South Korea’s Daewoo Shipbuilding and Marine Engineering Inc, covering the construction of a large Wind Turbine Installation Vessel (WTIV) with options for additional vessels.
“Scorpio Bulkers is embarking on a new and exciting journey. The world urgently needs to reduce emissions and offshore wind will make a pivotal contribution,” said Scorpio Chairman and CEO Emanuele A. Lauro. “We appreciate the encouragement and assistance of multiple partners – including suppliers, customers, and shipbuilders – as we take a significant first step in transitioning the Company towards a sustainable future. This strategic direction now aligns with our future customers, investors, finance providers and the growing momentum in global public policy. At the same time, the Board of Directors carefully considered this project and believes that this transition will result in higher and more predictable shareholder returns in a structural growth market. Our transition has begun.”
He added “Scorpio has a history of executing complex maritime projects and of building teams and expertise to enter new markets. We are fully committed to this new direction as an area of significant value creation for our shareholders and alignment with our multiple stakeholders. “
Delivery of the initial vessel is set for 2023. It will be built to GustoMSC NG-16000X design and will includes a 1500 Leg Encircling Crane (LEC) from Huisman Equipment B.V. Total project cost is expected to be approximately $265 million to $290 million, subject to final design modifications. The contract is expected to be signed in early fourth quarter 2020 and will include options to construct up to an additional three units having similar specifications.
The WTIV will be one of the most sophisticated dedicated turbine installation vessels in the world, says Scorpio. It will have the capacity to install onto pre-prepared foundations the largest wind turbines currently designed, at a height of over 185 meters above sea level and in water depths in excess of 65 meters. It incorporates various features and green innovations intended to significantly improve its operating window and efficiency and accelerate “time to first power” for customers.
Scorpio notes that offshore wind is a proven technology and represents a significant opportunity for the world to respond to the challenge of emissions reduction. It is expected to grow at a compound annual growth rate of over 15% for the next decade. There is a growing shortage of vessels that can install and maintain the next-generation turbines seen as core to this growth. Scorpio says that the increasing maritime complexity and innovation of the offshore wind sector play to its strengths and its board believes the company is in a good position to build an industry-leading presence.