Massive investments in offshore windfarms in Asia will generate opportunities for southeast Asian OSV owners, while Qatar gas expansion presents best near-term work in the Middle East
South Korea’s plans to build the world’s largest offshore floating windfarm could provide a major boost to anchor-handling tug supply (AHTS) vessel owners, particularly those in southeast Asia. Developed at a cost of US$32.5Bn, the 6 GW project announced by the South Korea government would be built at the site of the Donghae 1 gas field, which will shut production by the end of 2022. Some 20% of the electricity generated by the windfarm would be used to produce green hydrogen at offshore plants.
Initially, a 200 MW floating wind demonstration project will be developed by Korea National Oil Corporation (KNOC), Korea East-West Power (EWP), and Equinor.
Donghae 1 is not South Korea’s largest offshore wind project. Sinan offshore wind project announced earlier in the year, with installed turbines, is even larger at 8.2 GW, costing upwards of US$44Bn. Both offshore windfarms are to be commissioned in 2030. Outside South Korea, China, Taiwan, Japan and Vietnam are all making major investments in offshore wind, signaling a shift from the oil and gas market.
Speaking to delegates at the Annual Offshore Support Journal Virtual Conference in March, Maritime Strategies International associate director offshore Greg Brown said that with greater focus on renewables and greener sources of energy, “offshore now faces existential questions over its place within the broader energy mix.”
However, Mr Brown noted that increased renewables activity in Asia could provide a boost to AHTS vessel owners. “The greater number of floating wind installations off of South Korea, in particular, will drive a larger call on anchor-handling vessels in the medium term,” he said.
|Southeast Asia active and laid up vessels|
|as of end of April 2021|
|Vessel type||Active||Laid up||Utilisation rate|
|Offshore support vessels||963||325||75%|
|Offshore construction vessels||253||61||81%|
|Mobile offshore drilling units||42||18||70%|
Some OSV owners have been carefully reading the tea leaves. ASX-listed MMA Offshore inked a memorandum of understanding (MOU) with Worley to jointly provide integrated services to the offshore wind market in Taiwan and the broader Asia Pacific region. Already with a presence in the offshore wind sector, MMA Offshore sees the partnership with Worley as an opportunity to increase its market share. In May, MMA Offshore reported completing a survey work scope for the Formosa 2 Offshore Wind Farm Project, located off the coast of Taiwan. MMA Offshore used its DP2 vessel MMA Prestige to conduct several potential unexploded ordnance target investigations, and ran 168 km of magnetometer survey lines.
“The Chinese anchor-handling market remains robust”
In the oil and gas sector, MMA Offshore was awarded a contract in April by OMV New Zealand to support decommissioning work of several wells located in the Maui field, 35 km off the coast of Taranaki, New Zealand.
MMA’s UK-based engineering team developed a number of custom-designed engineered connector recovery and wellhead cap replacement components to replace the existing capping mechanisms currently in place on three wells.
Mr Brown said the worst of the sentiment was behind the oil and gas sector, as offshore operators turn their attention back to starting or restarting new or delayed projects: “If 2020 was abysmal or worse, then 2021 should certainly prove better than that.”
Highlighting activity in the Asia OSV sector, Mr Brown said the Far East fleet had about a 60% utilisation rate, noting that “PSVs are a drag on the market”, especially those from Singapore.
“The Chinese anchor-handling market remains robust and is served by a number of domestic players,” he said. “There’s only limited opportunity for international owners and unfortunately, Chinese demand is unlikely to be sufficient to absorb all of the vessels that are stuck in yards awaiting completion. Aside of China, we expect Malaysia to be more positive than the Indonesian and Vietnamese markets, where OSV utilisation is below 50%,” he added. Mr Brown noted that the handover of assets from Chevron to PTTEP should see greater near-term activity.
In April, UK-based ship valuation firm VesselsValue (VV) reported utilisation rates for all of southeast Asia for OSVs (75%), OCVs (81%) and mobile offshore drilling units (70%) based on AIS data. VV reported 963 OSVs, 253 OCVs and 42 MODUs were active at the end of April.
One OSV owner securing work in Indonesia is Singapore-based Miclyn Express Offshore (MEO). MEO’s ROV support vessel Miclyn Enterprise was reflagged from the Panamanian to Indonesian flag in Q2 2020. Since then, the 2008-built vessel has completed a pipeline touchdown monitoring project for a local subsea survey company in Indonesia, prior to undergoing its intermediate docking survey in February.
Dynamic positioning class 2-capable, Miclyn Enterprise is currently working on a post-lay burial inspection project across multiple countries until the end of 2021, reported MEO in a social media post.
MEO reported the fast crew and survey vessel Express 54 was upgraded with a new moon pool, two A-frames, and additional accommodation cabins for its current contract with an international dredging company, completing survey work for a new port in Bangladesh throughout the remainder of 2021.
Trio for Cambodia
Three MEO vessels were secured under a firm one-year contract offshore Cambodia. The AHTS vessel Uniwise Advancer and fast crew/utility boats Uni Express 14 and Uni Express 25 have been deployed under a one-year firm contract that contains two six-month options for a permit operator to provide offshore crew change and supply from the port of Sihanoukville.
The Thai-flagged, 2008-built Uni Express 14 has an overall length of 36 m, beam of 7.6 m and depth of 3.3 m, with three Cummins diesel engines, enabling the triple-screw crew boat to achieve a maximum speed of 24 knots.
Built in 2015 at Penguin Shipyard to Flex-40X design, the larger and newer 40-m Uni Express 25 has three Cummins main engines and three propellers, and can also hit speeds of 28 knots. Uni Express 25 has 100 passenger seats with a clear-deck area of 100 m2, deck-cargo capacity of 60 tonnes and Palfinger deck crane with a 0.5 tonne capacity.
Flying the Thai flag, Uniwise Advancer was built in 2003 and has a full suite of deck machinery, including two 10-tonne electro-hydraulic tugger winches, two five-tonne capstans, double-drum waterfall-type towing and anchor-handling winch, stern roller and one six-tonne telescopic deck crane.
“It looks like a long grind up before the sector can anticipate the pricing recovery”
In the Gulf of Thailand, offshore driller Valaris reported it had secured an extension for about 240 days with Mubadala Petroleum Thailand for the jack-up Valaris JU-115. Valaris expects the extension to start in Q1 2022, employing Valaris JU-115 through September 2022. The BM Pacific-class 400 jack-up has been under contract with Mubadala Petroleum since February 2021.
In the South Pacific, the Singapore-managed AHTS vessel VOS Champion commenced operations under an unusual charter for Geocean in Papeete, French Polynesia.
The DP2 AHTS vessel is the main construction vessel during the charterer’s pipelaying operations for an installation of a seawater air-conditioning (SWAC) system for the French Polynesia Hospital. SWAC systems use deep cold-ocean water to replace conventional air conditioning systems.
Geocean performed similar works in 2011 for the submarine installation of an equivalent SWAC system for the Le Brando Hotel on Tetiaroa atoll in Tahiti.
Built to ABS class at China’s Fujian Southeast Shipyard in 2016, Singapore-flag VOS Champion has an overall length of 65 m, beam of 16.4 m, design draught of 5.4 m, accommodation for 39, clear deck area of 425 m2 and deck cargo load capacity of 700 tonnes.
Middle East activity
In his analysis of the Middle East offshore sector in March, Mr Brown noted that there are about 900 OSVs located in the Middle East Gulf, equating to a 75% utilisation rate, with more than 120 laid up. “Unlike regions like Northern Europe or West Africa, the Middle East anchor-handling fleet is broadly homogenous. Vessels typically fall into either anchor-handling tug, or the 4,000 to 8,000 bhp AHTS benchmarks,” he noted.
While Qatar is spending billions of dollars as part of its North Field East expansion to increase its gas production and support its LNG exports, activity in the rest of the Middle East has been slow to develop.
|Middle East Gulf active and laid up vessels|
|as of end of April 2021|
|Vessel type||Active||Laid up||Utilisation rate|
|Offshore support vessels||951||206||82%|
|Offshore construction vessels||248||50||83%|
|Mobile offshore drilling units||76||23||77%|
“The lack of projects in the space and drilling activity outside of Qatar look to slow down the medium-term prospects for the Middle East,” he said. “This is far from a bull market. Be clear that the fundamentals are far more supportive in regions like West Africa, but the level of demand is unlikely again to be sufficient so as to absorb incremental vessels coming into the market.” He concluded: “It looks like a long grind up before the sector can anticipate the pricing recovery.”
In April, utilisation rates for the Middle East were healthy, with OSVs at 82%, OCVs, 83% and MODUs 77%, according to VV.
One new vessel that could come into the Middle East market this year was launched at the UAE-based Albwardy Damen Shipyard. Built to Damen PSV 3300 design, Naghi 1000 is a PSV that was originally being built by Ha Long Shipbuilding in Vietnam.
Details on Ha Long Shipbuilding’s website reveal that the PSV was launched five years ago – on 10 May 2016 – at the Vietnamese shipyard. Naghi 1000 has an overall length of 80 m, beam of 16.2 m, depth of 7.5 m, draft of 5 m, and deck area of 728 m2.
Shipbroker Seabrokers reports the vessel was relocated to the Middle East onboard the heavy-lift vessel Falcon alongside a sister vessel late last year. Saudi-based Naghi Marine has taken ownership of Naghi 1000, with final yard works being completed in Hamriyah before delivery in June 2021.
Heavy-lift transportation provider OHT sees opportunities emerging in gas production expansion in the Middle East, in Qatar and Abu Dhabi, for its fleet of five semi-submersible heavy-lift vessels. “The investments in new field-infrastructure create a string of transport requirements for offshore platforms from Southeast Asian fabrication yards to the region from as early as Q3 2021 until well into 2023,” it said. “OHT will be well placed to win a share of these transportation opportunities, building on similar work successfully completed for NOCs in Qatar in 2019.”