LUXEMBOURG– Subsea 7 S.A. has signed a letter of intent with Royal IHC in the Netherlands for the construction of a new reel-lay vessel and associated pipelay equipment.
The cost, excluding capitalized interest, is expected to be less than $300 million with delivery in early 2020.
The firm contract withRoyal IHC is expected to be awarded before the end of 2017, subject to certain conditions and final board approval.
When delivered, the vessel is said to be the company’s highest specification reel-lay vessel, capable of installing complex rigid flowlines including pipe-in-pipe systems and electrical trace heating. This capability will address the market trend toward longer tieback developments.
The new vessel will replace theSeven Navica, which is expected to be retired from reel-lay operations in due course.
CEO Jean Cahuzac said: “We are committed to having the right fleet size and specification to meet the needs of our clients. We achieve this through a combination of owned high-specification vessels and leased vessels having strict regard to capital discipline. We have removed three owned vessels from our fleet during the last two years and will continue to actively manage our fleet composition.
“The expected gradual recovery of market activity and application of new cost-effective technology supports this investment decision, which will enableSubsea 7 to participate in new prospects that are already visible in the market.”