InfraStrata awarded fabrication contract worth £26m
(INFA ) has been awarded a £26 million contract by engineering firm Saipem for the fabrication and load-out of eight wind turbine generator (WTG) jacket foundations.
Saipem, which is a global solution provider organised in five business divisions, is present in over 60 countries worldwide and has 32 thousand employees of 130 different nationalities.
The Group, which is focused on strategic infrastructure projects and physical asset lifecycle management, the works are to be undertaken for the EDF Renewables and ESB Energy owned Neart na Gaoithe Offshore Wind Farm project in the outer Firth of Forth in Scotland.
Neart na Gaoithe is a key UK offshore wind farm project that with up to £1.8billion invested in its infrastructure, is expected to have a major positive impact on the Scottish economy.
The project is owned by EDF Renewables, which is one of the UK's leading renewable energy companies focused on onshore and offshore wind as well as battery storage technology and ESB Energy, a Group which operates across the electricity market on the island of Ireland.
Today’s contract, which is valued at around £26m, is binding and contains contractual conditions and obligations on both parties, which are standard in contracts of this type. The Company highlighted that the contract schedule shall commence from 1 July 2021.
The fabrication, consolidation and load-out works of the eight WTG jacket foundations will principally be conducted at Harland and Wolff's newly acquired Methil facilities in Scotland.
Should there be an opportunity to optimise the works programme and make the contract more cost-effective, both parties will work jointly to spread additional work streams within the contract across InfraStrata’s three other sites; Belfast, Arnish and Appledore, it said.
John Wood, CEO of InfraStrata, said, "We are delighted to have entered into this contract with Saipem and I believe that this contract paves the way for the execution and delivery of future fabrication contracts, a significant number of which are currently in advanced negotiations.”
The Company noted that the geographical proximity of its Methil facility to the North Sea makes it “an ideal site for fabrication and load-out” to wind farm projects such as this.
Wood said it validates the Group’s strategic vision of expanding its fabrication footprint into regions that are strategically located within close proximity to major wind farm projects.
He said, “This will enable us to spread work streams across our facilities to drive down costs, deliver against tight schedules and, crucially, align ourselves to the government's goal of providing wind generated power to all homes in the UK by 2030. I am confident that this is only the beginning of a stream of projects in our pipeline that we expect come to fruition.”
Following “steady progress" in the first months of its financial year, InfraStrata recently said it expects ‘major renewable and fabrication projects’ to come into fruition in the months ahead.
The company noted that it now has the largest fabrication footprint in the UK, ‘with the capacity and capability of attracting large fabrication contracts by offering clients optimised delivery schedules, spreading fabrication risk across four sites and significant cost savings.’
Shares in InfraStrata have increased by nearly 10% in value over the past two weeks. The stock jumped 19.30% higher this morning to 51p following the company's announcement.
InfraStrata is a London-listed firm focused on the development, commercialisation and operation of advanced high-value strategic infrastructure facilities across the globe.
The group holds a salt cavern gas storage project at Islandmagee in County Antrim, Northern Ireland is a pioneering low-cost fast cycle facility that it believes will provide ‘safe, secure and flexible gas storage that will in time serve the island of Ireland and the UK mainland.’
In May 2020, the company entered into a term sheet with West Face Long Term Opportunities Global Master L.P to acquire Meridian Holdings Co., under which sits the proposed Floating Storage and Regasification Unit Project (“FSRU Project”), located in North West England.
The Project will be the UK’s first to be developed and commercialised. Since more than 30% of the UK’s natural gas supplies arrive via LNG (liquified natural gas) cargoes, the FSRU is positioned to take advantage of LNG arriving in the UK seeking storage and regasification.
The estimated CAPEX for the FSRU Project will be circa £350m-£450m with further CAPEX optimisation planned through value engineering. The CAPEX for the FSRU Project is expected to be funded by putting together a consortium of partners at the project level. Estimated project revenues come to £80-£100mm annually with a 25-30 year project life.
Discussions with key partners have commenced with a consortium consisting of globally recognised companies involved in the development, construction, operations and commercialisation of regasification terminals worldwide will be formed in due course.
In August 2020, the Group completed the acquisition of substantially all the assets of Appledore Shipyard in North Devon, enabling InfraStrata to compete from a ‘dominant position at two distinct ends of the shipyard market’ being the lower end of the market at less than 119 metres of dock length, with H&W - Appledore and the upper end of the market, requiring dock lengths of 300+ metres with H&W - Belfast.
The group signed a Letter of Intent (“Lol”) with Triumph Subsea Services to build two Windfarm Development Vessels ("WDV”) at a length of 200m and a beam of 35m.
The vessels will be built with diesel-electric hybrid engines that will eventually transition into hydrogen fuel cells, offering what management considers to be the ‘greenest’ solutions to wind farm developers.
The WDVs will be used for fixed and floating wind farm installations and sub-sea cable laying and providing marine services for offshore carbon capture and green hydrogen projects.
Significant Forward Pipeline
As the Group stands today, the Directors of INFA have identified a potential weighted pipeline of “£2 billion in contract opportunities between now and 2025” and believe there are near term revenue opportunities of £80.5 million and up to £825 million in the medium term.
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