Lead foundations contractor Saipem has “de-scoped” UK fabricator Harland and Wolff of half of an eight-unit jacket order for the 450MW Neart na Gaoithe offshore wind farm off east Scotland over delays at the latter’s Methil yard.
H&W has run into delays on the job, secured in 2021, and has yet to complete any of the bases, as reported exclusively in last week’s subscriber-edition of reNEWS.
It said materials for the jackets arrived late and some could not be used.
“Both parties (H&W and Saipem) have recognised the difficulties in meeting the project schedules due to these problems,” the company said in its interim results for the first six months of the year today.
“Therefore, a new agreement has been reached which will involve de-scoping the contract from eight jackets to four jackets.
“In recognition of the investments and fixed costs incurred by the Company for fabrication, a revised contract has been agreed for four jackets with a value of £23 million, in place of the original contract value of £26.50 million for eight jackets. The Company expects to deliver these jackets in sequence through Q1 2023.”
H&W said it has also conducted a review of its future operations at the Methil and Arnish yards.
It has found that the gestation period from the inquiry stage to the contract award stage can be as long as 18 months and so it will now target on contracts of between £4m and £10m rather than larger deals to keep revenue flowing.
“These contracts will be for the fabrication of specific component parts, transition pieces, tubulars, pipework and other such bespoke items for large wind farm projects. The Company believes that servicing multiple clients with smaller orders simultaneously will reduce the dependence on one single, large client and will significantly de-risk the operations of both facilities.”
Overall, H&W repoted an operating loss (including depreciation and amortisation) for the period of £14.06 million.
This deficit reflects an increase in the number of personnel and overall overheads, reflecting the need to service five assets (Belfast, Appledore, Methil, Arnish and London).
Operating losses included increased non-capitalised insurance, IT, recruitment, legal and asset maintenance costs on a much larger asset base relative to the comparative period, it added.