Working in partnership with leading players in the country, a newly-formed company formed by businesses ultimately linked to Malaysian industrialist Robert Kuok aims to provide a wide range of services to Taiwan’s offshore wind industry
August 2018 saw the anchor handling tug/supply vessel POSH Pahlawan arrive at Taichung Port in Taiwan to commence the first charter that the operator of the vessel, newly-formed POSH Kerry Renewables, has secured in the offshore wind market in Taiwan.
The joint venture’s first contract in the country will see it provide anchor handling, supply and standby support to an international geotechnical services operator during site survey, installation and construction of an offshore windfarm off the coast of Guanyin. The deal potentially includes other sites in Yunlin and Taoyuan-HsinChu. Work is scheduled to commence in Q3 2018.
As contracts go, it’s not a huge one, but the as Kelvin Teo, director of offshore supply vessels at PACC Offshore Services Holdings (POSH) Ltd, which has a 60% stake in the joint venture, told OWJ, the potential requirement for offshore marine and logistics services supporting Taiwan’s offshore wind industry is considerable.
The joint venture between offshore marine services specialist POSH and Taiwan-based logistics firm Kerry TJ Logistics was formed earlier this year. In the short time since it was formed, it has also signed a memorandum of understanding with local marine and towage company Seagreen Enterprise. The aim of the agreement with Seagreen is to leverage POSH’s track record of executing offshore marine projects to enhance its operational know-how and embark on joint initiatives to recruit and train Taiwanese crew.
Leveraging the capabilities and assets of both companies, POSH Kerry Renewables aims to provide a comprehensive portfolio including end-to-end transportation of wind turbines and components and diversified marine solutions during installation, operations and maintenance of offshore windfarms in Taiwan. With an established track record for executing offshore energy projects, POSH brings specialised offshore marine expertise and a modern fleet of vessels. Listed on the Taiwan Stock Exchange, Kerry TJ is Taiwan’s largest logistics provider.
The companies unveiled their tie-up a matter of months after the authorities in Taiwan awarded rights to develop the first commercial-scale offshore wind projects in the country, projects that will see up to several GW of offshore wind capacity off the coast of the country.
As highlighted by OWJ, Taiwan’s government is making good on longstanding plans to close nuclear power plants and invest heavily in offshore wind energy. Late April 2018 saw the authorities there announce the results of its first large-scale auctions for offshore wind in the country.
Taiwanese President Tsai Ing-wen has proposed to end the country’s dependence on nuclear power by 2025 while sourcing 20% of the country’s electricity from renewable sources – that is, five times the level in 2015. That plan depends heavily on offshore wind, for which the Taiwan Strait is seen as particularly well-suited, and up to US$30 billion is expected to be invested in offshore wind through 2025.
In the long run, Mr Teo explained, the JV has the potential to play a role at every stage of the installation and maintenance of offshore windfarms in the country, and POSH Kerry will be joined by other strategic partners who are keen to customise solutions for Taiwan’s offshore renewables market. A memorandum of understanding (MOU) has already been signed with Rolls-Royce to explore suitable designs for walk-to-work and service operation vessels (SOVs) specific to offshore wind operations and another has been signed with Macquarie Capital and Swancor to jointly explore collaboration opportunities in the Taiwanese market.
POSH is best known as a leading player in the offshore support vessel market in the region but as Mr Teo explained, it has taken note of the fast-growth in the marine renewables sector, where it has assets that it believes can play a role, particularly in the offshore wind industry. It has 40-50 vessels of various types that could play a role in the offshore wind industry.
“Taiwan has already emerged as a key market for offshore wind,” said Mr Teo. “We could see that there was huge potential in it for the services we can provide. What we needed to do was find the right partner in Taiwan, which we did in Kerry TJ Logistics.” Both companies are part of entities ultimately linked to Robert Kuok in Malaysia. Mr Kuok holds interests in POSH and Kerry TJ Logistics via Kuok (Singapore) Limited and Hong Kong-listed Kerry Logistics Network.
Mr Teo highlighted the importance in the Taiwanese offshore wind industry of local content, so the tie-up with Kerry TJ Logistics makes sense in a number of respects. Another reason the JV makes sense is the way POSH’s expertise in offshore marine complements the Taiwanese firm’s logistics skills. Both are important in offshore wind. The joint venture is also supported by Enterprise Singapore, which has been working closely with POSH on its entry into Taiwan, sharing insight into the market there and facilitating connections with key business partners.
Mr Teo believes that, together, the companies’ offshore offering will be more than the sum of its parts, and that the relationship with Seagreen further broadens its skillset. POSH brings barges, platform supply vessels, anchor handlers and, potentially, accommodation units to the party. Seagreen complements this with a local fleet of smaller vessels.
Mr Teo told OWJ that in due course, the newly-formed JV has the potential to broaden the scope of its activity in Taiwan quite significantly. In the long run, he does not rule out investing in installation assets, and the JV and related companies could even play a role fabricating monopile and jacket-type foundations, he said.
In the European offshore wind market, modified offshore support vessels were initially used as SOVs, but it quickly became clear that purpose-designed and built units were clients’ preferred solution, hence the JV’s relationship with vessel designer Rolls-Royce Marine.
“Conditions offshore Taiwan are different from those in Europe,” said Mr Teo, “so we wanted to get involved with a leading designer that could produce SOV designs tailored to the region and to the individual requirements of potential clients.”
The location of initial offshore wind projects offshore Taiwan could mean that specialised SOVs aren’t required in the short-term, he said, but in the longer term, for projects further from the shore, purpose-built SOVs could well be required.
Should the JV need to acquire specialised vessels such as SOVs to meet the requirements of a charter in the country, building those vessels in Taiwan would be a significant potential advantage given the Taiwanese government’s hopes for local content. That’s something Mr Teo and his colleagues are looking at, but a lot depends on finding a yard that could handle this kind of project and do so in the required timeframe. “We would like to be able to build in Taiwan, but at the moment we are keeping our options open,” Mr Teo said.
Going forward, said Mr Teo, the JV aims to continue with the strategy that led to its creation, combining Singaporean assets with those in Taiwan. The way that the JV was initiated and the MOU with Seagreen will form the template for future collaboration with Taiwanese players as the offshore wind industry in the country takes off.
Asia’s growing offshore wind energy sector and opportunities in it will be among the subjects discussed at Offshore Support Journal’s upcoming Asian Offshore Support Journal Conference, which takes place 26-27 September 2018 in Singapore.