Eneti Wins Contract for Newbuild Wind Turbine Installation Vessel - gCaptain
Eneti Wins Contract for Newbuild Wind Turbine Installation Vessel
Offshore wind installation company Eneti Inc.(NYSE:NETI) announced today that its wholly-owned subsidiary, Seajacks UK Limited, has secured a contract with an undisclosed client for the transportation and installation of turbines using one of its newbuild Wind Turbine Installation Vessels (WTIVs).
The contract, set to begin in the second quarter of 2027, will be carried out by one of Seajacks’ two NG16000X WTIVs currently being constructed by Hanwha Ocean in South Korea.
Expected to last between 180 and 210 days, including mobilization and demobilization, the engagement is projected to generate gross revenue ranging from US $73 million to $84 million. The total project costs are estimated to be $8 million.
“This contract emphasizes our position that market fundamentals remain strong,” said Eneti’s CEO, Emanuele Lauro. “As with our previous newbuilding contract, we have secured optionality in providing either of our newbuildings to service the contract, which maximizes vessel utilization and generates accretive cash flows. All in all, this contract serves both the needs of our customer and returns required of our shareholders.”
The previous contract Lauro is referring to was announced in September. The contract was signed with an undisclosed customer with mobilization commencing in the first quarter of 2027 at a day rate of around $410,000.
Eneti ordered the two newbuild WTIVs in 2021 with expected deliveries in the fourth quarter of 2024 and second quarter of 2025, respectively.
Eneti debuted in early 2021 as pure-play offshore WTIV shipowner after transitioning away from the dry bulk shipping sector under its former name “Scorpio Bulkers”. The company currently operates a market-leading fleet of five WTIVs through its wholly-owned subsidiary Seajacks UK Limited, which it acquired in 2021.
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Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.