InfraStrata (AIM: INFA ) has signed a Letter of Intent (“Lol”) with Triumph Subsea Services (“Triumph”) to build two Windfarm Development Vessels ("WDV”) at a length of 200m and a beam of 35m.
Under the terms of the letter, InfraStrata's fully owned subsidiary, Harland & Wolff (Belfast) Limited, will be responsible for the build, assembly and delivery of the WDVs to Triumph.
Once contracted, each vessel would be expected to generate revenues for Harland & Wolff of between £349m and £360m over the 24-30 month period of fabrication, followed by further revenues if further through-life support contracts are secured, the company noted.
The LoI initially covers the construction of one vessel, with Triumph having an option for an additional vessel to be built at Harland & Wolff (Belfast).
The vessels will be built with diesel-electric hybrid engines that will eventually transition into hydrogen fuel cells, offering what management considers to be the ‘greenest’ solutions to wind farm developers.
The WDVs will be used for fixed and floating wind farm installations and sub-sea cable laying and providing marine services for offshore carbon capture and green hydrogen projects.
In line with the UK Government's target of having at least 40GW of installed wind capacity, once constructed, the WDVs will also fulfil project developers' obligations to incorporate as much local content as possible within their projects in order to be eligible for and monetise the various Government-led incentives; particularly in the wind farm and marine sectors.
The group said the WDVs are expected to be fabricated with local materials from a UK supply chain and will be principally utilised for projects across all nations within the United Kingdom.
The next steps towards a binding contract will involve, inter-alia, analysing the detailed design packages, agreeing on the timelines and milestones from fabrication to delivery as well as placing the necessary financing structures by Triumph, and its partners, with Harland & Wolff.
Whilst both parties intend on executing a contract to build the vessels by the end of June 2021, this LoI currently does not provide for any binding obligations on either party at this point and should not, therefore, be construed to be a binding fabrication / build contract.
“As previously indicated, fabrication will become a huge element of our business moving forward and, by utilising both our Belfast and Appledore capacities symbiotically, we are able to provide an attractive work schedule to our clients,” said Chief Executive, John Wood.
He added, “Should this project proceed to contract, it will provide a sound base for Harland & Wolff to demonstrate its capacity and capability to deliver cutting-edge vessels, whilst retaining sufficient spare capacity for other projects across both yards.”
Today’s news follows an announcement earlier this week that Triumph Subsea Services had signed a contract with Croatian shipbuilder Brodosplit to construct a field development vessel.
Shares in InfraStrata have jumped in value by over 20% since the beginning of November 2020 to open 24.60% higher this morning at 54.2p following the announcement.
Reasons to Follow Infrastrata
InfraStrata is a London-listed firm focused on the development, commercialisation and operation of advanced high-value strategic infrastructure facilities across the globe.
The group holds a salt cavern gas storage project at Islandmagee in County Antrim, Northern Ireland is a pioneering low cost fast cycle facility that it believes will provide ‘safe, secure and flexible gas storage that will in time serve the island of Ireland and the UK mainland.’
In May 2020, the company entered into a term sheet with West Face Long Term Opportunities Global Master L.P to acquire Meridian Holdings Co., under which sits the proposed Floating Storage and Regasification Unit Project (“FSRU Project”), located in North West England.
The Project will be the UK’s first to be developed and commercialised. Since more than 30% of the UK’s natural gas supplies arrive via LNG (liquified natural gas) cargoes, the FSRU is positioned to take advantage of LNG arriving in the UK seeking storage and regasification.
The estimated CAPEX for the FSRU Project will be circa £350m-£450m with further CAPEX optimisation planned through value engineering. The CAPEX for the FSRU Project is expected to be funded by putting together a consortium of partners at the project level.
Estimated project revenues come to f £80-£100mm annually with a 25-30 year project life.
Discussions with key partners have commenced with a consortium consisting of globally recognised companies involved in the development, construction, operations and commercialisation of regasification terminals worldwide will be formed in due course.
Follow News & Updates from InfraStrata here: