Eneti Halts Plan to Build the Second U.S. Jones Act WTIV
In a surprise announcement, Eneti, which has been working to transform the former Scorpio Bulkers into an offshore wind service company, said it has discontinued discussions with a U.S. shipyard for the construction of a Jones Act-compliant Wind Turbine Installation Vessel. The company has ordered two installation vessels to be built in South Korea while repeatedly discussing its plans to also build a U.S. vessel, which would have been only the second Jones Act WTIV.
“We believe the U.S. market for offshore wind will offer significant opportunities for the company in the future,” said Emanuele Lauro, Chief Executive Officer of Eneti in a brief press release, “but right now we are focused on delivering on our existing commitments and deriving value from our existing fleet.”
Currently, the only WTIV under construction in the U.S. was ordered by Dominion Energy with work beginning on the vessel in December 2020 at the Keppel AmFELS shipyard in Brownsville, Texas. The vessel is expected to enter service by the end of 2023. Dominion Energy has said that it expects the vessel to be fully utilized in support of the installation of over five gigawatts of planned offshore wind generation off the East Coast of the U.S. through 2027 and beyond. Once constructed, the vessel will be available for charter, including by Dominion Energy Virginia, in connection with the installation of its Coastal Virginia Offshore Wind commercial project.
With more than a dozen other major offshore wind farms proceeding through the approval process for sites along the U.S. East Coast, including for example the recent approval of the construction plans for New York’s first wind farm and work beginning for the first large commercial U.S. wind farm being built off Massachusetts, the expectation is for strong demand for installation capabilities.
Eneti had repeatedly said that it was in advanced discussions with American shipbuilders for the construction of a Jones Act-compliant WTIV. The company has however also discussed the complicated design and high cost of building wind installation vessels. In November 2021, the company completed the sale of $200 million in additional stock to help finance the new vessels. The two WTIVs on order at Daewoo Shipbuilding and Marine Engineering are due to delivery in late 2023 and mid-2024 but could only operate in the U.S. market using feeder vessels.
While the company waits for the delivery of its new installation vessel, Eneti reported that Seajacks, which it acquired in 2021, has signed new contracts in Europe for its installation and maintenance vessels to the offshore wind sector for 2022 and in 2023 the company has a contract for one of its vessels to operate with Van Oord in Europe.