Seajacks is risk aware as growth continues

Early decision to back offshore wind pays off

A bright new office on the seafront at Great Yarmouth is indicative of Seajacks' success. Its fourth vessel, Hydra, is under construction and the company’s Dubai-based team is working on the design for its fifth jack-up, which will be capable of operating in water depths of 60-65m and will probably feature a 1,000+ tonne crane.

Back in 2006, Seajacks' chief executive, Blair Ainslie, could not have imagined how demand for offshore wind jack-ups would take off. But he and his backers made an educated guess that the offshore wind industry would strengthen, and they guessed correctly.

"When we created the company in 2006, the offshore wind industry was in the doldrums. It was an additional expense to equip our first vessel, Leviathan, with a 300 tonne crane suitable for offshore turbine generator installation, rather than a much smaller 50 tonne crane of the sort suitable for oil and gas," explains Ainslie. But it was the right decision. "By the time of delivery of the vessel in 2009, demand from the offshore wind industry was strong."

The vision that drove Ainslie and his investors was one of demand from the southern North Sea oil and gas market – and, possibly, an emerging offshore wind market – for jack-ups. "The principle was already there. They were used in the Gulf of Mexico, but they were small," says Ainslie. "But shipyards were busy at that time. We agreed that Lamprell would build two vessels – what became Leviathan and Kraken. We raised about £170m in equity and secured £180m in financing from a consortium of banks."

Offshore wind revenue

These days, about three-quarters of Seajacks' revenue derives from offshore wind work, with the remaining 25% coming from oil and gas contracts. Its 2011 revenue totalled about £75m, representing an 11% increase on 2010. Ainslie forecasts about 25% revenue growth for this year. Almost all of the company's revenue comes from vessel charter, with just 5% coming from project management services. But like some of its competitors, such as A2Sea, the company is taking on an increasing number of 'turnkey' jobs. Its work on the 288MW Meerwind Süd/Ost project in German waters is an excellent example. It is providing far more than vessel charter and reports that turbine installation has been progressing well this autumn.

Seajacks' clients have included oil and gas firms, Exxon Mobil and Taqa, as well as well-known offshore wind names: Fluor (Greater Gabbard), DONG (Walney I & II and Gunfleet Sands 3), Statoil & Statkraft (Sheringham Shoal) and Wind MW (Meerwind Süd/Ost).

With 260 staff, most of whom are offshore crew, Ainslie is clear about one thing: no agency staff. "That was a corporate decision based on my experience in the oil and gas industry," he explains. "The most important thing is not to be profitable - the most important thing is not to hurt anyone. We need staff to adopt our in-house safety culture and that can't be guaranteed with agency staff."

Open to partnership

Looking ahead, Ainslie admits there are risks that delays in the German offshore wind market could result in a temporary over-supply of vessels. Like its competitors, Seajacks needs a back-up plan.

Ainslie also acknowledges that he would like to see Seajacks develop a long-term partnership with one or more developers, as MPI and A2Sea have done. The company's vessel utilisation has been strong, but a more ongoing relationship with a developer would be the icing on the cake.

It is too early to know whether Seajacks' new owner, Marubeni, will be able to help in this area. What is clear is that Marubeni has been considering further investments in offshore wind projects. It already holds a minority stake in Gunfleet Sands. Should it buy stakes in other planned offshore wind farms, Marubeni would be able to bring both much-needed funds to the table, as well as access to a respected offshore wind vessel owner and turbine installation company. In just a few busy years, this is what Seajacks has become.