Swire sails into offshore wind farm market

Swire Blue Ocean has taken delivery of the biggest ship in the world specifically built to install offshore wind farm equipment in a move that marks the firm's entrance into the burgeoning global offshore wind farm market.

The firm is a subsidiary of Swire Pacific Offshore, which is part of the Swire Pacific Group that is also the major shareholder in Hong Kong flag carrier, Cathay Pacific Airways.

The 161 metre vessel, which has been named the Pacific Orca, will further enhance Swire Pacific Offshore's capabilities. Its main focus at present is providing tugs and support ships to oil and gas rigs. The Pacific Orca was delivered on Friday and will be joined by a sister ship, the Pacific Osprey, to be delivered at the end of the year.

Both ships are being built by South Korean shipbuilder Samsung Heavy Industries and will be deployed to Europe, where most wind farm developments are taking place.

They have six jack-up legs that can be lowered onto the seabed and push the vessel above the ocean surface. That allows the installation of wind farm equipment in water up to 60 metres deep.

Pacific Orca will help build the West of Duddon Sands offshore wind farm near Barrow-in-Furness on England's northwest coast. The vessel will install 108 monopile foundations, each weighing 650 tonnes, and associated equipment for the project, which is being developed by Denmark's DONG Energy and Scottish Power Renewables.

Rikke Stoltz, business development manager and director at Swire Blue Ocean, said the ship could carry up to five monopile foundations at a time. It also has the capacity to carry up to 12 turbines, comprising wind farm towers, generators and turbine blades, up to 3.6MW in size. It takes about 24 hours to install each turbine or foundation, but this depends on the exact nature of the installation work and the weather conditions.

Stoltz added that Swire Blue Ocean was likely to complete its involvement on the West of Duddon Sands project at the end of next year, and would later be joined by Pacific Osprey to help with the construction of the 400 MW DanTysk offshore wind farm 70 kilometres west of Sylt, an island in the North Sea, starting from the middle of next year. Stoltz said Pacific Osprey would also carry out decommissioning work in the oil and gas market, removing small platforms in the North Sea.

Swire has not released details about how much the vessels cost to build or their potential earnings over a service life of some 20 years.

'Europe is currently the leader in offshore wind development and the vessels are designed to handle the harsh North Sea weather conditions,' Stoltz said. 'As offshore wind projects develop elsewhere in the world, there will be opportunities for them to be deployed globally.'

Europe also currently had several large offshore wind projects on the drawing board, he added, as did China and several other countries.

Karsten Schulze, senior manager for energy and natural resources at management consultant KPMG, said Britain and Germany were the biggest markets for offshore wind farm development. Up to 6,000 offshore wind turbines are forecast to be installed by 2030 if the German government's expansion targets for wind energy are to be met.

KPMG and the European Wind Energy Association said in a report there were up to 30 installation vessels available or under construction.

But Schulze said there was a risk some of these ships could be idled in the next few years as a result of delays to offshore wind farm projects. He said technical issues in Germany, including the question of who pays for connecting wind farms to the national grid, and difficulties in arranging finance for wind farm projects given the current euro-zone difficulties could delay schemes. He estimated the cost of a wind farm at up to Euro3.5 million (HK$33.44 million) per megawatt, with a 400 MW scheme costing Euro1.4 billion, of which Euro800 million would be debt financed.