New York-listed Scorpio Bulkers is taking a first step into the market for wind turbine installation vessels (WTIV).
The bulker owner signed a letter of intent at South Korea’s Daewoo Shipbuilding & Marine Engineering for a $265m to $290m project.
Scorpio, an owner of conventional dry bulk vessels, is making the jump after more than a year of studying the technology, chief executive Emanuele Lauro told TradeWinds.
The vessel is expected to deliver in 2023, and with no payments required from Scorpio until 2022, there is no immediate need for the owner to take steps like issuing equity in connection with the project.
A contract is expected to be signed in the fourth quarter, with options for three additional units.
Lauro said that the initiative advances Scorpio within the growing green-energy movement while affording more stable revenue streams.
“This strategic direction now aligns with our future customers, investors, finance providers and the growing momentum in global public policy,” Lauro said.
“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,” Lauro said. “Our transition has begun.”
Long-term alliance
DSME is a long-term partner of the Scorpio Group in newbuilding projects and has been a client for even longer of Scorpio Bulkers president Robert Bugbee from his previous stints at the former OMI Corp and Gotaas-Larsen Shipping Corp.
It is expected that Scorpio Bulkers will tap existing relationships with the Export-Import Bank of Korea and Korean Trade Insurance Corp. The project is also likely to attract green-financing backers.
It would appear to be a natural under the Poseidon Principles compact launched by leading shipping lenders.
Scorpio said the newbuilding would be one of the most sophisticated WTIVs in the world, capable of installing the largest wind turbines that stand more than 185 metres above sea level and in water depths of 65 metres.
The rapid increase of power, height and weight of such turbines has created a growing shortage of vessels capable of accommodating them, Scorpio said.
The WTIV not only transports turbine components but is integral to the actual construction process. It has self-elevating features similar to a jack-up rig.
The wind turbine market is expecting a compound annual growth rate of 15% over the next decade.
“We have a great opportunity to build the next generation of wind turbine vessels, fusing our newbuilding experience and expertise, access to export credit and other sources of capital as well as the experience of our 8,500-strong employee base worldwide,” Lauro told TradeWinds.
“This opportunity has arisen due to the leap in turbine size which has created a gap in the supply chain facing demanding high-quality charterers — the kind we face every day in our existing businesses.”
The WTIV is an NG-16000X design by GustoMSC (a subsidiary of New York-listed National Oilwell Varco), and includes a 1,500 metric tonne leg encircling crane from Huisman Equipment.
Scorpio operates a fleet of 55 bulkers, 49 owned or financially leased, in the kamsarmax and ultramax sectors.
