Offshore wind is the lone bright spot in an otherwise sluggish market
(Article originally published in Sept/Oct 2019 edition.)
Offshore renewables is probably the only happy place in the commercial workboat sector right now. The development of offshore windfarms is picking up across the globe as is demand for specialized support vessels to do the heavy lifting.
“For many OSV owners, it’s the only place of refuge for their underutilized fleets,” says James Tham, Managing Director of Penguin International in Singapore. The company's shipyard is building aluminum vessels for various owners and for stock, having recently delivered its first windfarm crew transfer vessel to Njord Offshore for deployment in Taiwan's rapidly growing offshore wind industry.
Penguin is also selling crewboats to the oil and gas industry with Nigeria and neighboring countries taking up its armored Flex Fighters in piracy-plagued waters. There are currently more than 50 Flex Fighters operating in Nigeria alone, and Penguin builds more private high-speed security vessels than any other shipbuilder in the world.
“Chopper Swapper” Market
The “chopper swapper” market is another area of growth. “Crewboats have always been a safer and more cost-efficient mode of offshore transportation than choppers,” says Tham. “While crewboats lose out to choppers on speed, they gain back the edge on safety, carrying capacity, versatility and, of course, cost.”
Tham admits, however, that the transition from air to sea – while economically beneficial to oil companies – is psychologically challenging to chopper passengers and calls for a transformation of mindsets through a comprehensive change-management program: “A key element of this change management is the speed and comfort of modern crewboats. While one cannot reasonably expect a crewboat to operate at flight speeds, one can expect a crewboat to provide greater comfort and improved safety at reasonable sea speeds. As a matter of fact, you cannot lie back to read a magazine, banter with a colleague or even have a sandwich in a helicopter.”
Penguin's latest Flex-42X attains speeds of up to 30 knots and carries up to 80 passengers in reclining business-class seats. The vessels come equipped with Humphree’s active ride control interceptors that minimize rolling and optimize trim at higher speeds. Penguin’s Flex-42X also features FuelTrax's electronic fuel management system, and the latest Flex-42X in Penguin's own fleet, Alkahfi Chief, is equipped with Uptime’s 12-meter, motion-compensated gangway for safe and fast passenger transfer.
Technology innovation has taken a fresh turn with CWind in the U.K. announcing a charter with Ørsted for a surface-effect crewboat currently under construction at Wight Shipyard. Surface-effect vessels, which feature a catamaran design and air cushions, are one response to an industry-wide push to deploy innovative technologies that reduce CO2 emissions while cost-effectively servicing windfarms located farther and farther offshore.
Designed by ESNA of Norway, the diesel-electric vessel will have heave-compensation technology and will be able to operate in sea states of up to two meters. The design will accommodate further developments in hybrid propulsion and battery technology, ensuring it has the capability to be developed into a totally carbon-free solution in the future.
CWind says the vessel will enable Ørsted to construct and service windfarms efficiently through reduced transit times while, at the same time, supporting Ørsted’s ambition of a world that runs entirely on green energy.
Norway's Østensjø Rederi also has contracts with Ørsted. The shipowner has signed a letter of intent for the construction of four commissioning service operation vessels (CSOVs), a kind of accommodation vessel for windfarms. The 88.3 meter vessels were designed by Salt Ship Design, Norway, and are being built by Astilleros Gondán in Spain. Expected to be delivered from 2022 onwards, they will serve as mother ships for wind turbine technicians and maritime personnel as they perform commissioning and maintenance work.
Substantial efforts have been made to ensure their environmental compatibility. The CSOVs come equipped with a hybrid battery propulsion system which, together with other energy-saving equipment, will significantly reduce greenhouse gas emissions. The generators onboard are IMO Tier 3-certified.
Working with its partners, Østensjø Rederi is developing new technologies based on hydrogen, and the newbuildings can accommodate future installation of this technology, which the company says will turn them into zero emission vessels without compromising operational capabilities. Such focus on and investment in environmentally friendly solutions is possible with Norwegian government support schemes, says the company.
Norway-based Atlantic Offshore operates emergency response vessels, oil recovery vessels and PSVs in both U.K. and Norwegian waters. In Norway, says CEO Roy Warenberg, polluters pay, and rightly so. His company has just spent $2.5 million each on two vessels receiving hybrid battery packages from Wärtsilä.
The two vessels, Ocean Star and Ocean Art, already have excellent fuel and emissions characteristics, boasting diesel-electric propulsion with motors of different power output that are run optimally by computer. In a tough market, Warenberg aims for a competitive edge, offering green vessels that provide decent rates and okay economics.
Wärtsilä’s hybrid propulsion capability, including a hybrid drive, batteries and energy management system, is also featured on the Acta Centaurus, a DP-2, walk-to-work construction support vessel owned by Netherlands-based Acta Marine. The vessel has a high dynamic positioning load and thus fluctuating power requirements, making it ideal for hybrid power. A 15 percent reduction in CO2 emissions is possible.
In addition, Wärtsilä has been selected to engineer, supply and commission a hybrid propulsion system for the subsea construction vessel Viking Neptun by Norway-based shipowner Eidesvik. Wärtsilä's system includes two 870 kWh battery packs and two 2.7 MW drives pre-installed in containers. Wärtsilä will also upgrade the vessel’s existing switchboard and integrated automation and power management systems.
Vice President for Marine Services at Crowley in the U.S., Johan Sperling sees cause for optimism in the Gulf of Mexico. There are “some indications the market's starting to at least speak to us again. We are busier now than we were prior.”
He says the company has kept its vessels in good shape: “We're not like a lot of other organizations. We didn't lay any of these vessels up. We kept them in operation by sliding them across other business areas to get utilization out of them. So we're in a unique spot in comparison to a lot of our competitors.”
He's optimistic about the offshore wind market too – watching developments but not yet ready to commit to investments. The market is not yet mature enough to predict with certainty, he says, noting that the U.S. faces different challenges to the more established European market.
“Massachusetts versus Rhode Island versus New York: They are like different countries, different continents,” he observes. “What you can do in Rhode Island is not necessarily something you could do in Massachusetts.” Still, he says, Crowley wants to be in the middle of the market if it takes off.
Foss Maritime has already moved on the market, signing an MOU with Østensjø Rederi to provide domestic service operation vessels for offshore wind projects in U.S. waters. “After spending time in Europe engaging with marine service providers,” says vice president Paul Gallagher, “we’re very fortunate to have developed this relationship with the experienced team at Østensjø.”
Foss’s ongoing fleet expansion program is progressing with construction of the first of four new Tier IV ASD 90 tractor tugs at Nichols Brothers Boat Builders. Designed by Crowley subsidiary Jensen Maritime Consultants of Seattle and based on Jensen’s Valor tug design, the vessels will meet Tier IV standards using high-efficiency catalytic after-treatment technology to reduce emissions. The Z-Drive tractor tugs will be built to U.S. Coast Guard Subchapter M regulatory standards with ABS loadline certification. The vessels will be equipped with two MTU series 4000 main engines, Rolls-Royce US255 azimuth thrusters and Markey winches.
The 100x40-foot tugs are multifunctional and have towing, ship-assist and escort capabilities. Foss plans to operate the tugs on the U.S. West Coast, performing ship-handling duties in ports and harbors. Delivery of the first of four vessels is scheduled for winter 2020.
Like Foss, many other operators are incorporating renewables into their scope of service. In the subsea vessel market, brokers Fearnley Offshore Supply notes that engineering and construction firm Subsea 7 received the largest number of awards among Tier 1 contractors in the third quarter of 2019. Not only were the contracts spread geographically, their scope of work involved both hydrocarbon and renewable energy developments.
Fearnley sees a slow reduction in the global OSV fleet, a positive sign for charter rates as vessels are sent for recycling or sold to alternative markets. One example of repurposing is a PSV owned by Borealis Maritime. World Opal is currently being converted to a fish feed transport boat at Damen Shiprepair and Conversion.
Fearnley's quarterly report concludes: “The question of when the market will be 'in balance' again still persists, but with the limited amount of newbuild deliveries coupled with a steady volume of vessels being sold for recycling, in addition to vessel sales to alternative markets, there are undoubtedly positive signs going forward.” – MarEx
Wendy Laursen is the magazine’s Asia-Pacific Editor.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.