Growth in the offshore wind sector is helping some of the oil industry’s traditional contractors weather the storm visited by Covid-19 and low commodity prices, allowing them to make up some ground lost to the lull in new offshore oil and gas projects.

The engineering, procurement, construction and installation players are also betting that the incoming administration of US President-elect Joe Biden, who campaigned on a renewables-friendly energy platform, will bring even greater rewards. But they are finding offshore wind opportunities globally in many of their traditional markets.

UK-based contractor Subsea 7’s chief executive John Evans told investors in a recent online event that the company's non-hydrocarbons business accounted for $2.2 billion of its $7 billion backlog as of the end of the second quarter.

About $1.7 billion in new orders from the offshore wind sector provided a bright spot in an otherwise gloomy second quarter for the Oslo-listed company.

Adapting early

Italy's Saipem is also starting to benefit from adapting early to the energy transition.

“At the beginning of the year, we decided it was worth having a dedicated business line, pooling major assets and dedicated resources we can use to provide leverage in this sector,” says Guido D’Aloisio, head of offshore renewables with the big Italian contractor.

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Adapting offshore assets and experience have provided leverage for these companies to swiftly build up a core business of transport and installation services for wind turbine generator (WTG) foundation and cable-laying.

In Saipem’s case, investments in the company’s Karimun Island yard in Indonesia and the Arbatax yard in Sardinia have created competitive production lines for supplying WTG and offshore substation foundation jackets, and they are expected to play a key role in a predicted boom in floating wind farms. The facilities produce jackets at a rate of one per week.

“One difference between offshore wind and the oil and gas industry is that you need to learn to do serial production, and to do it well. This was a step change in mentality for us, and investments in the Karimun yard have followed this strategy,” D’Aloisio says.

Saipem’s background in handling EPCI contracts for the oil sector has helped the company offer an ample range of offshore wind solutions to complement the WTG foundations business.

Earlier this year, the company won its first turnkey EPCI contract for an offshore wind farm from EDF Renewables on Scotland’s £1.8 billion ($2.3 billion) Neart na Gaoithe (NnG) project.

The workscope includes 54 steel foundation jackets supporting wind turbine generators and two steel foundation jackets for the offshore electrical substations.

Saipem’s engineering played a role in winning a €552 million ($648 million) EPCI contract for 71 concrete gravity-based structures as WTG foundations for another EDF Renewables project, the Fecamp offshore wind farm in Normandy, France.

Monopile foundations

A technical solution for uncertain soil conditions was key to Saipem emerging as the preferred bidder for an EPCI contract to provide 75 monopile foundations for the Courseulles-sur-Mer offshore wind farm being developed by a joint venture of EDF Renewables and Enbridge, also in Normandy.

Each 6 megawatt turbine will be installed on a tubular steel tower mounted on a monopile foundation, but guaranteeing soil stability required a drilling and well-packing operation.

Saipem’s EPCI background means the company is keen to develop integrated projects through contracts with project-wide scope — known in the offshore wind industry as balance of plant — in its new growth sector, but has had to bide its time, as many of the pioneering investors lean toward a multi-contracting approach.

“Coming from the oil and gas business, we want to offer a full spectrum of services, adding value along the chain. This usually means controlling execution of project and bringing enhanced competencies at each step, but if entering this market also means bidding for (transport and installation) at first tier, or even second tier, we are not shy of doing this,” D’Aloisio says.

The migration of oil giants such as BP, Shell and Total into offshore wind could result in them bringing their contracting experiences with them, resulting in broader EPCI formats, D'Aloisio believes.

Operating under the Seaway 7 brand, Subsea 7 has installed more than 700 wind turbine jacket foundations and laid 1600 kilometres of cables on more than 30 renewables projects.

The materiality of this business became evident in 2016, with a $1.3 billion EPCI contract on the 588MW Beatrice wind farm in Scotland, covering foundations for 84 turbines and 165 kilometres of inner array cables.

Recent awards include a $1.4 billion EPCI balance of plant contract for the Seagreen wind farm, where Total recently acquired a 51% stake from SSE Renewables.

This 1.14 gigawatt project, located in Scotland’s Firth of Forth, requires the installation of suction caisson foundations for the 114 turbines, along with 330 kilometres of inner array cables.

Seaway 7 recently won its first integrated T&I project covering wind turbine foundations and cable for the Hollandse Kust Zuid wind farm, building on early engagement with Swedish energy company Vattenfall.

The 1.54GW subsidy-free project featured 140 monopile foundations which were installed with dynamically positioned vessels and without transition pieces.

Inroads

Seaway 7 made its first inroads in the US market earlier this year with a contract to install array cables for two demonstrator wind turbine generators off the coast of Virginia.

With Biden's promises to stimulate investment in renewables, there are rising expectations about a boom in bottom-fixed wind farms on the north-eastern seaboard and in floating wind farms off California.

Offshore wind is also taking off in the Far East, with opportunities opening up in Taiwan, South Korea, Japan and Vietnam.

Belgian marine engineering outfit Jan de Nul took the lead as the main contractor on Taiwan’s Formosa wind farm projects, with both Subsea 7 and Saipem also involved.

Tenders are out for offshore wind contracts on the north-east seaboard of the US and offshore Australia, among other locations.

Subsea 7's projections point to investments in offshore wind growing at a compound annual growth rate of 18% in the second half of the decade, with installed capacity rising at a rate of 20%.