Strong subsea market needs newbuild orders

Subsea vessel market saturation point and financing sources 

Braemar Shipbroking managing director and global head of offshore energy services Edward Molyneux said a vessel shortage for subsea construction support and maintenance means that the recent rise in newbuilding orders will be easily absorbed in the forecasted market.
Mr Molyneux said there are 22 vessels on order to support deployment of remotely operated vehicles (ROVs) for subsea maintenance and construction work, and just one diving support vessel under construction.
"The market can absorb these newbuildings and there is room for more subsea vessels to be built," he said. "It is a sold-out market, and with 60% of the fleet over 15 years old, there is a need for more newbuilding ordering." 
Mr Molyneux said there would be market space for around 10 more ROV support vessels on top of the current global orderbook. But, he cautioned that there would be challenges in finding the finance and available yard space.

Fearnley Securities director of investment banking Frederik Joys described the various sources of financing for subsea vessel newbuildings, conversions and upgrade projects.
These include private and public equity, bank financing, public bonds, alternative debt providers and project finance. Mr Joys said owners of vessels that could work across offshore renewables and oil and gas could be better suited for bank finance. 
"There is more finance available in 2025 than in 2024 and 2023, and more hunger from bond and equity markets, while banks are starting to come back," said Mr Joys.
Clarksons Norway market analyst Jon Are Olsen reiterated the message of a market with high demand and utilisation and need for newbuild orders to renew an ageing fleet.
He said newbuild construction support vessels could cost around US$100M, which would be lower than purchasing an existing vessel. "With an average age of 14 years old, the fleet will need to be renewed," said Mr Olsen. Clarksons identified there are 124 construction support vessels in the global fleet and 16 in the newbuild orderbook.

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