Large dredging contract as profits surge
Dutch dredging and marine civils contractor Van Oord has been awarded a land reclamation project in Kuwait valued at some €500m for client Kuwait National Petroleum Company (KNPC).
The project involves the reclamation of land in a ‘sabkha area’ (a salt plain near the coast) for the construction of a new refinery. The New Refinery Project is situated in the Al-Zour area south of Kuwait City.
Work on the project will begin immediately, with completion to take 30 months. The project involves dredging and reclaiming some 65 million cubic metres of sand and executing extensive ground consolidation. The project will also include constructing various channels, a basin for a future jetty, a barge dock and roads. Van Oord will deploy large trailing suction hopper dredgers and cutter suction dredgers.
Van Oord has just reported net profit for 2013 up 30% to €130m on a turnover of €1,641m. The company’s order book remains strong at €1.9bn. The net profit was positively affected by the settlement of a number of outstanding claims in Dubai from 2005-2008. Higher operating revenues considerably decreased the net debt.
Van Oord realigned its strategy in the past year by analysing its activities in dredging, offshore oil & gas, and offshore wind. In the present five year period (2013-2018), it will be pursuing a strategy of growth.
“That growth will come mainly from our offshore (oil & gas) and offshore wind projects business units, says CEO Pieter van Oord. “We don’t plan to take on any new activities outside our own sector because we believe our existing activities offer enough potential for growth.”
The volume of activity in the dredging market remained stable in 2013 and the occupancy rate for Van Oord’s fleet was slightly higher than in 2012. There were major changes in the various markets worldwide, however. The European market improved, although this has not resulted in higher prices. Pieter van Oord.
The Offshore Wind division recorded limited turnover in 2013. The year was dominated by preparations for two major projects, Luchterduinen and Gemini. The Luchterduinen wind farm is being constructed 23 km off the Dutch North Sea coast for energy company Eneco.
2013 was a key year for the Gemini project, a 600 MW wind farm that will be constructed 60 km north of the West Frisian island of Schiermonnikoog. New shareholders with responsibility for financing have taken over the project from the developer. Gemini is a so-called non-recourse construction finance, with the construction contract executed by Van Oord and Siemens. “We will own 10% of the project’s equity capital, says Pieter van Oord. “We expect the project to reach financial close in April. Construction will proceed in 2015 and 2016.”
