GMS secures two UK offshore wind projects

Abu Dhabi-based Gulf Marine Services (GMS), an oil service vessel operator, said yesterday it had won two offshore wind contracts in the United Kingdom as the sector benefits from record investments reached last year.

The company, which supplies offshore vessels for the oil, gas and renewables sector, said it would provide Dong Energy two jackup vessels to service the offshore substations for the Hornsea Project One, which will be one of the world’s largest offshore wind farms. The value of the contract was not disclosed.

"The wind turbine market is expected to improve in 2017, and these new contract wins are evidence of the increasing tender opportunities in this sector for GMS," Duncan Anderson, chief executive of GMS, told The National.

The company also won a third short-term contract for its small class vessel to support oil and gas-related operations for a client in the Middle East. It did not disclose details.

GMS reported a 60.8 per cent year-on-year drop in profit to US$29.4 million last year amid waning utilisation rates for vessels. And while there is a drop in hydrocarbons, the rise of offshore wind is increasing as a result of falling costs.

Investment in offshore wind totalled $30 billion last year, up 41 per cent from the previous year, according to a report released last week by the UN Environment Programme, the Frankfurt School of Finance and Management and Bloomberg New Energy Finance (BNEF). European investments made up about 80 per cent of the global sum including projects such as the 1.2 gigawatt Hornsea project, which is estimated to cost $5.7bn.

Angus McCrone, BNEF’s chief editor, said that the offshore wind sector was the most surprising find. “The offshore wind record is a big thing – it’s enormously up compared to where it was just a few years ago and the cost reduction is very important,” he said. The capital cost for offshore wind projects starting construction last year was 10 per cent lower than in 2015. Denmark hit a world record in November, producing power from offshore wind at only 5.5 US cents per kilowatt hour.

lgraves@thenational.ae

Follow The National's Business section on Twitter