Singapore company expects vessel to be delivered as agreed in recent settlement with Danish shipping giant

 

[SINGAPORE] Seatrium said it is &ldquo closely monitoring&rdquo the Trump administration stop-work order issued to the end-customer of a U$475 million wind vessel job, noting that it can be redeployed beyond the US market.

 

Seatrium was responding to The Business Times&rsquo queries on Tuesday (Dec 23) after news broke that morning that Empire Offshore Wind had received a US government order to stop construction on the Empire Wind 1 project due to &ldquo national security concerns&rdquo . 

 

Four other wind projects also received similar orders from the US Bureau of Ocean Energy Management, including the Coastal Virginia Offshore Wind, the country&rsquo s largest such project. This is the second such order affecting Empire Wind 1 this year the first was in April.

 

In October, the Singapore offshore marine company received from Maersk affiliate Phoenix II a termination notice for the wind turbine installation vessel meant for the Empire Wind 1 project, which was scheduled for completion in the early part of 2025. 

 

On Monday, Seatrium said the two parties have reached an agreement with the Maersk affiliate to pay the balance of the contract price &ndash valued at US$360 million. 

 

Upon delivery of the vessel by Feb 28, 2026, Seatrium will receive upfront payment of about US$110 million. The remaining US$250 million will come from an interest-bearing loan of up to 10 years granted by Seatrium and this will be funded by cash generated from the vessel. 

 

Seatrium will also have first priority rights over the asset and the buyer&rsquo s bank accounts.

 

According to Citi analyst Luis Hilado, the latest development should not derail the settlement. &ldquo Management noted that the vessel utility is not limited to the US offshore market and as such can be redeployed to European markets.&rdquo  

 

He added: &ldquo As such, despite the recent suspension of the Empire Wind project anew, there are offsets to the project and commercial launch risks embedded in the new contract.&rdquo

 

He added that any share price weakness from the news of the suspension itself would be an opportunity to accumulate the shares instead.

 

Shares of Seatrium were flat at S$2.13 on Tuesday as at the midday trading break, having climbed 2.9 per cent the previous day on news of the Maersk resolution.

 

Empire Offshore Wind on Tuesday said it was engaging the relevant authorities to &ldquo better understand this matter&rdquo . Its Empire Wind 1 project, which is &ldquo more than 60 per cent complete&rdquo , has been set to connect to New York&rsquo s grid and provide enough power to electrify 500,000 homes.

 

Norwegian state oil company Equinor, which is developing the Empire Wind 1 project, said: &ldquo In total, dozens of vessels, around 1,000 people, and more than a hundred companies in the US and globally have been working in coordination on the Empire Wind project.&rdquo  

 

It added: &ldquo The stop-work order threatens the progress of these activities and, without a swift solution, there may be significant impact to the project.&rdquo