Offshore focus pays dividends for Spanish yards

Focusing on the construction of offshore support vessels (OSVs) has enabled a number of well-known Spanish shipyards to prosper in recent years, among them Balenciaga, Metalships, Astilleros Zamakona and HJ Barreras. With a potentially damaging investigation by the European Union (EU) in 2011 now behind them, the same yards are confident of securing more work from the sector once again.

The issue rumbled on for much of 2013, but a solution was found and yards say they have put the issue behind them, although a number of important orders won by them were jeopardised by the issue and some yards are understood to have lost orders to other countries, including some in Asia, because of the uncertainty.

Spain was alleged to have broken EU rules for support to its shipyards. Following complaints from other European countries, the European Commission alleged that the scheme that was in place made Spanish shipyards more competitive than their counterparts elsewhere in Europe. The Commission ruled that the arrangement was unlawful.

In a statement issued in mid-2013, European Commission vice-president Joaquin Almunia said: “Economic interest groupings and their investors had benefited … from tax advantages which they must now repay to the Spanish state.” However, the Commission noted that the ruling did not affect an existing scheme which allows the government to give tax advantages directly to the shipbuilding industry.

The crux of the matter is that the Commission concluded that the Spanish scheme for the acquisition of ships involving leasing and financing through tax relief was “partly incompatible” with EU rules on state aid. The commisiion argues that the scheme, which was set up in 2002, conferred a selective advantage on economic interest groupings and their investors over their competitors. The Commission stated that it was not notified of the scheme for the purpose of prior authorisation. The Commission said it would not require the repayment of aid granted between the start of the scheme in 2002 and April 2007, when the Commission publicly declared a similar French scheme incompatible. In addition, on 20 November 2012, the Commission approved a new Spanish scheme for the early depreciation of assets acquired via finance leases.

Since the Commission issued its statement another important development has taken place with the acquisition by Pemex, Mexico’s state-owned oil company, of a 51 per cent (and hence a controlling interest) in Spanish shipyard HJ Barreras. Pemex formally took control of the Vigo-based yard in January 2014. Speaking at the time that the deal was formally concluded, Carlos Roa, chief of staff of Pemex’s directorate general, said the Spanish yard had been awarded a number of contracts including tankers for Pemex and a fishing vessel. An order to build a dynamic positioning class 3 (DP3) multipurpose offshore vessel for Grupo Diavas is expected to be concluded shortly. Mr Roa also announced plans to build what he described as “Barreras in Mexico”. Two possible locations for the yard have been identified and a technical co-operation agreement could, it is said, lead to the transfer of expertise and some workers from Mexico to Spain “and in the other direction”.

Shortly after the deal between Pemex and Barreras was confirmed, it was also announced that Barreras and Spanish shipbuilder Navantia had been selected to build two monohull offshore accommodation vessels for Pemex. The vessels are designed to accommodate 700 people and will have DP3 dynamic positioning capability. They will be 131m in length with a beam of 27m, deadweight of 7,000 tonnes, and will be classed by Det Norske Veritas (DNV). One vessel will be built at Navantia and one at HJ Barreras. They are due to be delivered 30 months after signature of contract. The design of the vessels was a joint effort between the two yards, which will be fitted with an as yet unselected ‘walk to work’ offshore access system and an offshore crane. A spokesperson for Navantia said that although intended to operate in the relatively benign conditions offshore Mexico, the accommodation units would also be suitable for use in other areas where conditions are more challenging.

As highlighted in the Jan/Feb 2014 issue of OSJ, another well-known builder of offshore vessels, Balenciaga, recently delivered two high-spec PSVs to North Star Shipping in the UK. The yard is also building more safety standby or emergency response and rescue vessels (ERRVs) for the same customer. The PSVs, Grampian Sceptre and Grampian Sovereign, are of IMT 982 design. Both units were contracted to work for Talisman Sinopec Energy UK Ltd on five-year charters in the North Sea.

2013 also saw Craig Group invest £70 million in six more new vessels at Balenciaga, including four D-class IMT 950 ERRVs and two F-class IMT 958 ERRVs, which are due to be delivered during 2014 and early 2016. A spokesperson for the yard said the latest order from North Star Shipping would ensure that it was fully occupied until mid-2015. Once the latest vessels to have been ordered are delivered, Balenciaga will have built 27 ships for the British shipowner. The yard puts its success down to building high quality vessels at the right price, and to developing personal relationships with key clients. It also attributes much of its success to a process of continuous improvement in its facilities in recent years. Large sums have been invested in the assembly line at the yard and in technology such as plasma cutting and new, automated welding equipment.

Another well-known Spanish yard, Astilleros Gondan, was responsible for building Østensjø Rederi’s latest newbuild, the environmentally-friendly PSV Edda Ferd, which entered service early in 2014. The vessel has since gone into a long-term charter with Shell UK and has been described by Østensjø as “the world’s most environmentally friendly PSV” having a new type of hybrid diesel-electric propulsion plant developed jointly by Østensjø and Siemens. As of the end of January, the yard was completing work on another high-spec PSV, Stril Luna, which is being built for the Norwegian shipowner Simon Møkster. The vessel, of Rolls-Royce UT 776 WP design is 92m in length with a beam of 20m and deck area of in excess of 1,000m2. Due to be delivered in July 2014, the vessel is the first of Rolls-Royce’s ‘WP’ or ‘wave-piercing’ designs. The yard attributes much of its success to its flexibility, the ability to build highly specialised, “bespoke” designs and to respond to modifications to designs during the construction process.

Towards the end of 2013, Heerema commissioned the anchor-handling tug Kolga, which was built in Vigo, Spain. Kolga and sister vessel Bylgia were designed and built by Astilleros Armon to replace HMC’s tugs Husky and Retriever. Both new tugs are equipped with a retractable bow thruster and have DP2 dynamic positioning. With a length of 72m and breadth of 18m, the fully custom-built tugs are larger than Husky and Retriever. Each has a bollard pull of 202 tonnes and can hold up to 2,500m3 of fuel, sufficient to sail directly from Rotterdam to Cape Town, South Africa. The anchor winch capacity is able to install anchors in water depths of up to 1,500m. Kolga’s first task was to tow the heavy-lift unit Thialf from Africa to the Gulf of Mexico.

January 2014 was also noteworthy for Zamakona shipyard, which launched Ocean Marlin, the second of three vessels for Atlantic Offshore. The multirole vessel’s principal mission is to provide emergency support to rigs and installations. The vessel is due to commence work on behalf of Total in the second quarter of 2014 and is a Havyard HY820 field support vessel. The first vessel in the series, Ocean Osprey, was launched in August 2013, and was due to begin work for Shell at the beginning of 2014.

Other recent newbuilds built by Spanish yards include EDT Hercules, which was launched on 24 July 2013 at La Naval Shipyard in Sestao, Spain, and Deep Orient, an offshore construction vessel for Technip that was delivered by Metalships & Docks earlier in 2013. OSJ