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Dutch steel tubulars manufacturer Sif Holding NV (AMS:SIFG) said Wednesday its contract to supply 84 monopiles for the Empire Wind 2 offshore wind project in the US has been canceled.
This follows a decision by Empire Wind 2 developers Equinor ASA and BP Plc to terminate the project’s contract for providing power to New York amid economic headwinds. Another Empire Wind 2 supplier, Singapore’s Seatrium Ltd, has also seen its contract for the project’s offshore substation platform terminated.
Sif’s contract for 54 monopiles and transition pieces for Empire Wind 1 is unaffected.
According to the announcement, Equinor, which is a shareholder in Sif, will try to fill the gaps in Sif’s production schedule resulting from the Empire Wind 2 termination, which could mitigate the cancellation fees Sif is entitled to. Production for Empire Wind 2 was planned for the period 2025-2026.
Sif maintained its projections for adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for 2025 and 2026 and said its expansion in Rotterdam is not impacted.
“Empire Wind 1 remains, as originally planned, the launching project for our newly expanded production facility at Maasvlakte 2 with production starting from the end of July 2024. The first steel deliveries for this project are expected in January and February 2024,” its statement reads.
The part of Empire Offshore Wind’s advance payments in support of the new factory that relates to Empire Wind 2, namely EUR 30.5 million (USD 33.4m), will be converted into a perpetual bond.
(EUR 1 = USD 1.095)
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