David Morant, Scorpio Group's UK managing director, has revealed more of the company's plans to break into the potentially lucrative offshore wind turbine installation sector.
New York-listed dry bulk arm Scorpio Bulkers last month said it was investing in a state-of-the-art wind turbine installation vessel (WTIV) at DSME in South Korea, with three options attached.
The vessel is costing up to $290m.
"It's a very exciting time for our company," Morant told a Clarksons Platou Securities webcast.
"Inevitably when you get into this space, you think long and hard. There are significant capital barriers."
Morant said the company had to answer three big questions to justify its move: why, what and how.
"Why? For us this really plays to our strengths in terms of clients that we deal with — the major oil companies," Morant said. "Through our broader business, these are clients that we face many times a day in our tanker business and in our other chartering operations."
He added that as turbines move further offshore, "as a thoroughbred maritime company, this is an area where we can deliver a service to demanding charterers that we think we've got a proven track record in doing so".
Options to be declared
The "what" part of the equation is obviously the ship on order at DSME. The executive also said the WTIV deal is likely to expand.
"At this juncture, I think we can be very clear that we can expect those options to be exercised," he told the webcast. "We've got a great price. We think we've ordered the world's most advanced, dedicated WTIV."
Scorpio has spent four years analysing the sector.
"We're very excited about what where we've ended up," Morant said. "This is very much a customer-focused project, to deliver vessels that are going to last well into the next couple of decades and reduce time for our customers."
Turning to the question of how, he said it was a question of timing.
Salad or rubbish?
"My first boss told me that the only difference between salad and garbage is timing," Morant said. "We've worked very hard to have our vessels delivering into a market that is tightening."
He said the decision to build in South Korea opens up most of the Asian region, including Taiwan and Vietnam.
"We have a significant pedigree in the US capital markets," Morant said. "You can expect we are working very hard in the offshore US wind industry, which is becoming increasingly topical, dare I say political."
Scorpio's 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.
Morant sees a tightening market over the next three to four years. He put typical operating costs at $30,000 per day for WTIVs, with rates at $220,000 per day.
