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OFFSHORE WIND
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WARTSILA TIV

February 22, 2010

Aker Philadelphia eyes wind turbine installation vessels

Could Aker Philadelphia Shipyard soon find itself building wind turbine installation vessels?

The good news in the just released fourth quarter 2009 report from Aker Philadelphia is that it continues to get better and better at building tankers. "Continuous improvement projects have continued to decrease our costs with a reduction in production hours and other costs," it notes.

The not-so-good news is that only four tankers remain committed for under its arrangements with AMSC and OSG.

"A key focus for 2010 continues to be securing new orders to expand the backlog," says Aker Philadelphia. "Start of production for the first unsecured/option vessel (Hull 017) is planned for Spring 2010, but this schedule is dependent upon securing a firm order and/or construction financing for this vessel. Although no firm orders or construction financing are in place, AKPS has made prior purchase commitments on long lead items for Hulls 017-020 as tankers and continues to make commitments on Hull 017 as required by the intended production schedule. If Hull 017 is not built, whether pursuant to a firm order or on speculation, it is estimated that the company would incur expenses in excess of USD 15 million. If the shipyard is unable to build additional vessels beyond the current 12-ship series without a significant interruption, then the company would incur significant additional expenses and it would be very challenging for the company to continue operations after delivery of the twelfth tanker. In addition, because multiple vessels are in production at any one time, lack of continued firm backlog will cause operational inefficiencies for completion of the remaining vessels in the current 12-ship series."

Aker Philadelphia says it continues to pursue prospects for new construction projects for the future and that product and shuttle tankersand containerships remain important prospects.

"Additionally," it says, "as a result of renewable energy initiatives, AKPS is evaluating requests for the construction of vessels to support the installation of offshore wind turbines. AKPS considers each opportunity for the value it would create for AKPS and it shareholders."

In fact, had the DOT Tiger grant awards list looked a little different, Aker Philadelphia might be saying rather more about turbine installation vessels (TIV).

The Philadelphia Regional Port Authority (PRPA) applied for $135 Million in Tiger grant funding to cover 30 percent of the anticipated cost ($450 Million) of constructing three TIVs at Aker Philadelphia. In support of this effort, Bluewater Wind LLC established a marine services affiliate, Bluewater Nautilus LLC, to seek financing for the remaining 70 percent of construction costs and to oversee the construction, certification and operation of the vessels. Bluewater Wind committed to use the Tiger-enabled TIVs for its offshore turbine installation requirements for a period of seven years.

PRPA did not succeed in securing the Tiger grant. However, Bluewater wind is emerging as a leading player in the potentially huge U.S. offshore wind market and will certainly need TIV's.

The Wärtsilä self?elevating platform design proposed in the Tiger application is a barge type, pontoon shaped hull, self-propelled with four mooring winches and four thrusters for DP2 operation. The vessel has four jack-up legs and a deckhouse athwartships in the forward part of the pontoon.

Length OA is 108.75 m including anchor rack, molded beam is 40 m and leg length is 75 m.

The vessel is equipped with an 800?ton offshore crane with a main hook height of 100 m above deck and area coverage of the entire main deck, making it an ideal platform to install and maintain offshore wind turbines and operate as a high?profile logistical asset for the offshore wind industry. In general, the deck is designed to carry loads up to 15 tons/square meter.

The vessel is also equipped with a helicopter platform capable of day and night operation in the elevated and floating conditions. The hull is prepared structurally for the future installation of a moon pool, which gives the vessel the possibility to be used as an offshore support vessel for oil and gas projects.


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