The Dutch offshore wind basis producer, Sif, has acquired a discover of termination of its Empire Wind 2 monopile contract from the three way partnership owned by BP and Equinor, who’ve simply terminated their Offshore Wind Renewable Power Certificates (OREC) settlement for the 1,260 MW mission with the New York State.
Sif was contracted to fabricate 54 monopiles and 54 transition items for the 816 MW Empire Wind 1 and 84 monopiles for Empire Wind 2. The corporate was additionally in unique negotiations for the manufacture of the transition items for Empire Wind 2 as effectively.
Sif has eliminated the contracted capability from its order e book and, beneath the phrases of the contract, is entitled to compensation within the case of the contract being cancelled. Moreover, the termination will have an effect on the sequence of producing for 2025 and 2026, however the financing of the enlargement of the manufacturing services at Maasvlakte 2 in Rotterdam stays secured with the share of the advance manufacturing unit cost for Empire Wind 2 changing right into a perpetual bond, in line with Sif.
“Below the phrases of the contract for monopiles for Empire Wind 2, Sif is entitled to cancellation charges within the occasion of early termination of the contract. Equinor will endeavor to fill the gaps in Sif’s manufacturing schedule that come up because of the termination of the Empire Wind 2 contract. A profitable effort might lead to mitigation of the compensation charges to which Sif is entitled beneath phrases of the contract,” the corporate stated on 4 January.
“The cancellation doesn’t have an effect on the financing of the enlargement plans in Rotterdam which are in execution and on schedule. A price range of €328 million for the enlargement plans has been secured together with €50 million upfront funds by Empire Offshore Wind that have been paid in 2022. The a part of the advance funds that pertains to Empire Wind 2 (€30.5 million) might be transformed right into a perpetual bond. The bond has no mounted maturity date and will be redeemed by Sif at its principal quantity along with accrued and deferred curiosity at any time at their comfort. There isn’t a danger of a covenant breach due to this cancellation.”
The contract for Empire Wind 1 will proceed as deliberate, with manufacturing scheduled to begin within the second half of 2024.
As reported earlier at present, 4 January, BP and Equinor have additionally cancelled their contract for the Empire Wind 2 offshore substation, price USD 250 million (round EUR 228 million), signed final yr with the Singapore-based firm Seatrium.
Commenting on Sif’s cancelled contract for Empire Wind 2, Fred van Beers, CEO of Sif Holding: “Whereas it’s disappointing that Empire Offshore Wind needed to terminate provide contracts for his or her Empire Wind 2 US mission for now, it’s also clear that Sif’s monopile contract for Empire Wind 1 just isn’t affected.”
“From a broader perspective we’re assured that offshore wind developments in the US, as is the case in Europe and the UK, will proceed to ramp up given the pressing want for inexperienced power and discount of world warming.”
Van Beers highlighted that Empire Wind 1 remained the launching mission for Sif’s newly expanded manufacturing facility at Maasvlakte 2. The manufacturing for the 815 MW Empire Wind mission is scheduled to start out on the finish of July 2024 with first metal deliveries anticipated in January and February 2025.
“Over the approaching interval, we’ll enter into discussions concerning the results of this termination in the identical constructive method as now we have all the time carried out with Empire Offshore Wind, as a revered shopper and one in all our launching prospects, and with Equinor as a shareholder within the firm. Collectively we’ll, as a lot as potential, pursue mitigating measures for the results for each Empire Offshore Wind and Sif. This contains our full help to analyze the potential of rescheduling and/or reserving different tasks for the related capability,” Fred van Beers stated.
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