OHT and Subsea 7 Combine to Pursue Opportunities in Offshore Wind
Seeking to create a larger, full-service company focused on the renewables business and the emerging opportunities in offshore wind, subsea oil and gas company Subsea 7 and heavy transportation and installation company OHT have agreed to combine their operation. The new company, to be named Seaway 7 will position itself as a pure-play renewables company offering installation of wind turbines, foundations, offshore substations, submarine cables, and heavy transport focusing on the offshore fixed wind business.
The combination will be effected through a transaction after which Subsea 7 will own 72 percent of the combined company while OHT’s shareholders will own 28 percent. The new company will be publicly traded retaining OHT’s listing on Oslo’s Euronext Growth market and hopes in the future to list on the main board of the Oslo Bors. The combined company will have approximately 600 employees, with an active fleet of ten vessels and two foundation and turbine installation vessels, which OHT is building in China. Subsea 7 will retain its business in floating wind, which will not be part of this transaction.
“This is a very significant event in the growing renewables industry,” said Torgeir E. Ramstad, Chief Executive Officer of OHT. “Subsea 7 is a highly respected company, and we are delighted that it sees OHT as a natural partner in creating a new global leader in renewables.”
The two companies cited the expected strong demand for the services of contractors as the offshore wind industry pursues its projected high growth. Between 2020 and 2030, the annual installation of wind power, measured in gigawatts, is anticipated to grow at a compound average rate above 20 percent. The companies said while the foundation installation market is currently competitive, the markets for cable lay and turbine installation are more favorable and installation capacity in all markets is expected to be absorbed by 2025. They expect the market dynamic of all three sectors to improve from 2025 onwards.
The new Seaway 7 company will offer a full range of transport and installation services that combine the installation of turbines, foundations, substations, and cables. The addition of heavy transportation capabilities provides further integration opportunities as well as mitigating risks associated with delivery schedule management. The two vessels under construction in China due for delivery in 2022 and 2023 will also provide Seaway 7 with a quick entry into the foundation and installation businesses.
OHT brings to Seaway 7 ASA a fleet of five heavy transportation vessels, increasingly deployed to transport large offshore wind structures. Its first new vessel due in 2022 is customized for wind turbine foundation installation equipped with dynamic positioning and designed for efficient installation of monopiles as well as jacket foundations. The second, due for delivery in 2023, is a jack-up heavy lift vessel capable of efficiently installing the largest wind turbines as well as wind turbine foundations.
Subsea 7’s Renewables business unit brings to the combination a long track record of executing large and complex offshore wind projects. Since 2009, it has installed over 700 foundations, more than 30 substations, and over 800 kilometers of submarine cables using its fleet of two heavy lift vessels, two cable lay vessels, and an installation support vessel.
The transaction is anticipated to be completed by the end of the third quarter of 2021, subject to approval by OHT’s shareholders, regulatory approvals, and other customary conditions.