Petrofac (LON: PFC) and Hitachi Energy have been awarded a mammoth, multi-year offshore wind framework agreement by transmission system operator TenneT.
The deal is largest of its kind in Petrofac’s history, and covers six projects, each comprising the EPCI of an offshore HVDC transmission station, onshore converter station and associated infrastructure.
Every scheme will be executed under a standalone contract, valued at over £1.75bn, split between Petrofac’s and Hitachi Energy’s scopes.
Sami Iskander, Petrofac’s Group Chief Executive, said: “Today’s announcement represents an exciting next step in Petrofac and Hitachi Energy’s collaboration. We have already secured key resource and the yard capacity required to expedite the first two projects in TenneT’s ground-breaking programme. By combining Petrofac’s industry-leading EPCI expertise and Hitachi Energy’s well proven technology, we look forward to supporting TenneT to connect larger, more effective wind farms to deliver affordable clean energy for millions of European homes.”
Five of the renewable integration systems will connect offshore wind farms to the Dutch grid, while the sixth will hook into the German grid.
Each system has a capacity of 2 gigawatts (GW) and a voltage level of 525 kilovolt – a world-first for offshore wind.
Energy services giant Petrofac says the deal will allow it to “plan in advance, secure the required resources and yard space,” as well as capture synergies between successive projects.
Petrofac will undertake the Engineering, Procurement, Construction and Installation (EPCI) of the offshore platforms and elements of the onshore converter stations.
Meanwhile Hitachi Energy will supply its HVDC Light converter stations, which convert AC to DC power offshore and DC to AC onshore.
The first contract under the Framework, for the Ijmuiden Ver Alpha project, was awarded with immediate effect.
The second, Nederwiek 1, is expected to be awarded later in the year.
The Framework also includes projects Doordewind 1, Doordewind 2, Nederwiek 3 and LanWin5, expected to be awarded over a 2024 – 2026 timeframe.
Tareq Kawash, who takes over from Mr Iskander as Petrofac’s CEO on April 1, added: “Today’s award demonstrates the significant new growth horizon presented by the Energy Transition, and the role companies like Petrofac will play. I will be very proud to support Petrofac’s collaboration with Hitachi Energy and delivery of our role on TenneT’s 2GW programme over the coming years.”
Niklas Persson, managing director at Hitachi Energy’s grid integration business, said: “This innovative business model will set the course for the integration of a huge amount of offshore wind power and gives visibility of the future. In fact, we are already hiring to expand our global delivery capacity and effectively fulfill these and other orders. We’re proud to be part of this journey and, along with our partner Petrofac, we are setting the benchmark for deploying offshore HVDC technology at scale and with speed.”
Marco Kuijpers, director large projects offshore TenneT said: “The new long term approach goes hand in hand with a fundamental change in values towards a strong partnership. This approach enables both sides with more flexibility, technological progress, and planning security. This benefits all parties and secures employment, growth, and the strengthening of supply chains. We can already see that our partners invest in extra resources and facilities.”
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