Malaysian company Sapura Energy has issued a termination notice to Yunneng Wind Power Company in respect of a contract for the transportation and installation of monopiles for the 640MW Yunlin offshore wind farm off Taiwan.
Sapura said the group’s wholly-owned subsidiary Sapura Offshore was awarded the contract in March 2019.
The Malaysian company said it has been advised by “external international counsels” that it “has an immediate right to legally and contractually terminate the contract”.
It added that following the termination notice, “Sapura Energy will pursue its claims via the dispute resolution process prescribed in the contract, namely arbitration under the German Institution of Arbitration in Bremen, Germany”.
Sapura Energy Group chief executive Datuk Anuar Taib said: “Negotiations with Yunneng to remedy the breach began in November last year.
“Since we exhausted all avenues for an amicable solution, we made the tough decision to terminate the contract in the best interest of the Group.”
Sapura said the project was initially expected to be completed in September 2020, but completion was delayed to September 2023 “following unresolved technical and operational issues not attributable to Sapura Energy”.
It added: “These changes significantly altered the basis of the contract.”
German company WPD is leading the development of Yunlin.
WPD declined to comment on the Sapura announcement.
Other investors in the project are Total, Electricity Generating Company and a consortium of Japanese investors led by Sojitz Corporation.