Nordic Yards shipbuilding platform

The offshore wind power development has had a significant impact on the shipbuilding industry in Europe, which is currently building seven offshore converter platforms. German, Danish and British shipyards are competing for customers of alternative energy solutions. Nordic Yards Russia head Vladimir Bazhenov told PortNews in a recent interview about the industry new direction and the capabilities of the company’s shipbuilding yards.

Three of the seven High Voltage Direct Current (HVDC) platform contracts were awarded to German shipbuilder Nordic Yards.

- Vladimir, Nordic Yards shipyards are currently engaged in construction of three offshore converter platforms. How do manage to cope simultaneously with multiple complex projects?

- Nordic Yards shipyards are one of the most modern, not only in Europe. In 1998 -1999 Nordic Yards implemented a large-scale modernization at its locations - Rostock-Warnemünde and Wismar. We have a number of advantages - first of all our team of highly qualified specialists, our own design office, modern, the state-of-the-art equipment, covered shipbuilding halls, enabling to construct vessels with a length of more than 300 meters, as well as direct access to the Baltic Sea. This allows manufacturing on our yards special purpose ships and offshore facilities of high class.

Nordic Yards shipyards are of high tech, shipbuilding companies, capable of building simultaneously four offshore converter platforms, all of them are constructed in covered docks.   

Today we are finalizing the first of three platforms ordered by Siemens Energy, our major customer in Europe. The order for the first two platforms was placed at our shipyards in the spring of 2011, the third one was ordered early this year.

- How much time is required for the construction of one platform? Is the outfitting of a platform different from that of, say, a tanker?

- We began the construction of the first offshore HVDC BorWin beta in the spring of last year and plan to deliver it by the end of the year. The second converter platform HelWin alpha - in early 2013. The third - SylWin alpha, the largest of four platforms, will be delivered in the second half of 2014. The construction of one HVDC takes on average from 18 to 24 months. We develop an individual design for each platform. The platform characteristics depend on the location - geographical and climatic conditions in which it will operate, as well as on the capacity of power equipment installed on the platform. It’s hard to compare the platforms with the ships since its features and functions differ very much. We can say that these units are built with the most advanced technology - because the foundation (base) of a platform will be placed permanently in the aggressive marine environment for 30 years. After this period the facility will undergo its first scheduled maintenance. The surface part of the platform is similar to the most modern ships. There is almost all equipment, except maybe the fuel tanks - machinery rooms, workshops and even accommodations for a service team, as the constant presence of personnel on the platform is not required. The platform features powerful energy system with technology, which allows conversion of alternating current generated by wind farms to direct current before sending it onshore via subsea cables. In addition, the platform has its own helipad.

- What are the characteristics of, say, the largest of the platforms under construction?

- Overall height of SylWin alpha is nearly 80 meters, width - 56 m, length - 82.5 m. The outfitted topside weight is an equivalent of 25 Airbus A380 jumbo jets. Its installation can be performed without the use of heavy floating cranes. Upon completion, both parts of the platforms will be towed by tugs to the installation site, located about 70 km off the west of Sylt in the North Sea and will transform and transmit to the German mainland up to 864 megawatts of energy generated by the DanTysk and Butendiek wind farms. This will be enough to power, for example, Frankfurt-am-Main. Besides, the platform can be based 120 km from the mainland.

- Is the construction of platforms a new business direction of the company? Has Nordic Yards secured newbuilding orders for the near future?

- Nordic Yards specializes in four key segments: construction of passenger ships and ferries of various types, the Arctic vessels, offshore oil and gas facilities, and offshore wind power platforms.

Having experience in the construction of HVDC, we plan to develop this extremely promising segment. In addition, we hope that in the near future we can build a platform designed by our own engineering office. The offshore wind farms are gaining popularity in Europe, so for Germany such platforms are truly unique - ocean development is similar to space exploration. Given the alternative energy development projects favorable outlook (by 2020, the share of renewable sources in the total energy consumption in Germany should increase to 30%), we expect to secure similar orders in the future.
Currently, Nordic Yards has formed a portfolio of orders for HVDC platforms until 2014. After delivery of the third platform to Siemens Energy, we hope to be awarded contracts for three converter platforms from other companies.

- Is this shipbuilding segment profitable?

- I can tell you the price range for three platforms - in the world market such contract is valued at about 450 million euros.

- Do you expect to get HVDC contracts from Russian customers?

- In Russia, the alternative energy systems projects are still the subject of debates. The prospects for implementation of alternative energy solutions are presently very small here, because of huge initial investments in the sector. In order to encourage investment in this segment the Russian government is developing mechanisms to promote the utilization of renewable energy sources, through a special mechanism of trading such energy. Of course, eventually, with the development of alternative energy in Russia construction of specialized vessels and offshore converter facilities may become an interesting niche for shipbuilding companies.   

- What are the major activities of Nordic Yards in Russia?

- Our largest Russian partner is MMC Norilsk Nickel. We are successfully implementing in conjunction with the company shipbuilding projects for the Arctic. Nordic Yards has built four container ships and one tanker for operations in the Arctic for this Russian corporation. Besides, we have upgraded two Arctic container ships – the Norilsky Nickel and the Talnakh.

The Arctic tanker Yenisei (Nordic AT 19) is a good example of our cooperation. The unique, Arc7, 19,000DWT ship capable of sailing in the 1.5-m-thick. The tanker can endure temperatures down to -50°C. It complies with safety requirements of two classification societies - RMRS and DNV. Now the ship is successfully sailing between Dudinka on the Yenisei River and European ports transporting gas condensate and delivering to the Norilsk industrial area oil products (gasoline, jet fuel, diesel and fuel oil).

MMC Norilsk Nickel is a very important partner for us and we look forward to our future successful cooperation. Our own engineering bureau has designed a project of an Arctic-going containership capable of carrying up to 1,400 containers. The vessel features high ice-class Arc8, which enables the ship to sail in 2-m-thick ice. This container ship is in fact an ice-breaker and can be operated 10 months a year on the Northern Sea Route.

- Do you think the Northern Sea Route could be prospective? What solutions could you offer for operations in the Arctic?

- The presence in the Arctic will become more and more important with each year, at the state level, at the level of industrial companies and research organizations. In terms of offshore exploration and production of oil and gas resources, and in terms of development of such thoroughfare - the Northern Sea Route.

Actually, the Northern Sea Route could become not only one of the main lane to deliver goods from Russia’s North-West to polar industrial facilities and back, but also as a source of the state budget replenishment from the transit fees between the EU on the one hand and Japan, China, South-East Asia and the Pacific Coast of the U.S. on the other.

We have developed projects of new ships, for example, 13 MW coal carriers. These vessels are similar to the Arctic Express-class we have built for the Norilsk Nickel. The difference is that this type of ship was designed to carry coal in the northern latitudes. Currently coal from Yakutia, Krasnoyarsk is transported by rail, but the commodity logistics is not perfect. The coal, shipped through the Arctic basin, could be a low-cost fuel for Arctic projects development. We believe Russian mining companies could be potential customers for this type of ship, but for now, we do not have any customer for this product.

As the company has been experienced in implementing similar projects designing and construction of ice-class ships is very important for Nordic Yards. Since its inception our company has constructed at its yards more than 900 ships, over 150 of them have ice class 1A and above.

- Besides the Arctic, are there other fields of cooperation with Russian companies?

- We believe the construction of fishing vessels, passenger and cargo ferries, cruise liners and mixed river-sea cargo ships could be promising. Actually, we are interested in all projects related to the construction of offshore oil / gas facilities, as well as supply vessels. More specifically, we would be willing to take part in all projects of Gazprom, Rosneft and Sakhalin Energy.

- Did you submit bids on diesel-electric icebreaker contracts invited by Russian government? Will Nordic Yards take part in its construction as a subcontractor? What would you offer the United Shipbuilding Corporation that had won tenders to build nuclear and diesel-electric icebreakers?

- We are ready to participate in the construction of new icebreakers of Russia. We have participated and will participate in all newbuilding tenders. Currently, we are in talks with the USC, as we would be willing to do part of the job. At the same time, we are interested in high-tech jobs, which would allow us to use our shipyards technologies. For example, we wouldn’t opt in the construction of some hulls, we would like to execute complicated outfitting, start-up works and to hand over the ship. I am confident that we could fruitfully cooperate in icebreaker projects with Baltic Shipyard and Vyborg Shipyard, as well as with Rosatom.

Nordic Yards is extremely interested in working in conjunction with Russian shipbuilders. We are open to any form of cooperation, both through JVs and in the industrial cooperation. This partnership will help transfer of shipbuilding technology, of the German experience in effective management of newbuilds projects, training of the Russian shipbuilding companies’ personnel at Nordic Yards, and to raise low-cost loans at European banks (5% interest per annum). In the case of a newbuld construction at a German shipyard, its price may be lower than in Russia. Another important addition - Nordic Yards’ own naval engineering office provides service at the level of a design institute and is able to design "from scratch" the project of any complexity vessel, and to make a deep revision of already finished project. We believe that these benefits will help to achieve greater efficiency in implementing joint projects with Russian partners, and most importantly - to execute it in a short time and in strict accordance with the customer’s requirements.

- What competitive advantages do your shipyards enjoy over its Russian rivals, performing the current icebreaking order?

- Yes, our shipyards have a number of advantages over Russian shipyards. Nordic Yards builds ships in covered dry docks. These huge docks (over 300 m long and 60 m wide) are the object of envy of many shipbuilding companies. There is nothing of the kind in Russia. We boast another competitive advantage, our highly qualified staff, who were trained here, at our shipyards.

The entire fabrication process at the modern shipyard in Wismar, from steel-cutting to launching, is carried out under one roof. This solution saves time and reduces the cost of operations.
We are able to manufacture simultaneously several ships in one dock, and the vessels delivery could be made at different times. And this is only a part of our advantages.

- How busy are your shipyards today? Are you able to extend the current portfolio of orders?

- Our yard’s workload encourages us, but we would like to add more, as there is a considerable reserve capacity. Shipyards should build ships and we have highly trained specialists, and we keep jobs no matter whether we are building a platform or merchant ships. Our two yards workforce is about 1,000 people. The shipyard’s labor productivity is 3.5 times as high as in Russian companies.

- Was the global shipbuilding hit by crises? Do you see a way out of it?

- Yes, certainly it was. However, the crises hit such market segments as the construction of tanker fleet, container and dry bulk carriers, which have a surplus. European shipyards have a niche that they successfully occupy - construction of high-tech special purpose vessels such as rescue vessels with diving equipment, vessels for construction works, offshore drilling platform supply vessels. It’s a good time to develop this shipbuilding segment thanks to international trends in the offshore fields development. The struggle for hydrocarbons moves into the Arctic. Mining of such minerals as gold, copper is now carried out under water. There is a need for equipment for mining and for service fleet, which will serve them and operate as shuttle ships.

- What, in your opinion, is the main trend of the last years in the development of shipping and shipbuilding?

- Major trends in world shipping and shipbuilding are primarily related to the tightening of environmental safety requirements. One of the most significant trends in this regard is the transfer from the engines consuming ordinary fuel to dual-fuel and LNG-powered engines. Environmental organizations impose more stringent requirements to ballast water treatment systems.

Our design bureau has developed the conceptual design of Arctic LNG carrying vessel with a capacity of 175,000 cbm. The LNG carrier has a unique patented design of Aluminum Double Barrier Tank (ADBT) tanks for safe storage and transportation of LNG. The new system eliminates the shortcomings of the membrane tanks and spherical types for the cargo transportation in the Arctic, in particular, the system increases the safety of LNG transportation, including in storm conditions, provides for partially filled tanks. In addition, one of the features of the project is that the ship is built with a niche for the so-called "removable tanks" and the tank is installed in the last stage of construction. This makes the project safer and shortens the construction of the vessel for at least six months.

Generally speaking, Nordic Yards, thanks to its solid experience of completed projects and a high level of technical equipment of its shipyards, not only follows best international trends in the development of the shipbuilding industry, but is a pioneer in the industry, demonstrating the highest level of contracts execution and project management. Hopefully, in the near future we will be able to successfully apply our experience and expertise in execution of orders in conjunction with Russian partners.

Interviewed by Yelena Snitko.