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UPDATE: Petrofac Wins Contract As Seagreen Reaches Financial Close

Wed, 3rd Jun 2020 17:38

(Alliance News) - Petrofac Ltd on Wednesday confirmed a contract win to design, supply and install the high voltage alternating current onshore and offshore substations for the Seagreen offshore wind farm project.

SSE PLC earlier on Wednesday said SSE Renewables has entered into an agreement to sell a 51% stake in its Seagreen 1 offshore wind farm project to Total SA for GBP70 million.

Petrofac said the contract includes the engineering, procurement, fabrication, transportation, installation and commissioning of the offshore substation platform, including the topside, jacket and piles. The onshore substation EPC scope includes all civil works and major equipment.

SSE Renewables has reached financial close on the Seagreen 1 offshore wind project, London-listed energy provider SSE said, and it will be Scotland's largest wind farm once complete with a capacity of 1,075 megawatts.

"Following the agreement with Total we are looking forward to delivering the Seagreen offshore wind farm which will contribute towards building a cleaner, more resilient economy as we pursue a green recovery from coronavirus by unlocking GBP3 billion low carbon investment, creating green jobs and generating the zero-carbon power we need to reach net zero," said Jim Smith, managing director of SSE Renewables.

The sale to Total includes a potential extension opportunity of up to 360 megawatts. SSE Renewables will continue to lead on the development and construction of Seagreen 1 and will operate the asset on completion, which is expected in 2022/23.

SSE's future equity investment is expected to total around GBP850 million over the years 2020 to 2022, with the equity contribution for 2021 financial year expected to be less than GBP50 million.

In addition to the upfront payment of GBP70 million, Total, in a separate announcement to SSE on Wednesday, said it will pay earn-outs up to GBP60 million in aggregate subject to performance conditions.

The French energy firm added that it has secured close to 70% of external financing for its 51% stake.

"Total builds up a strong position in the world's largest offshore wind market, as it becomes a majority stakeholder in the Seagreen 1 project, one of the largest offshore wind farms in the UK North Sea. This move represents a major change of scale for Total's offshore wind activity in line with our strategy of profitable growth in renewables and low carbon electricity," said Patrick Pouyanne, chair & chief executive of Total.

Shares in SSE closed up 1.6% at 1,304.50 pence in London on Wednesday, while Petrofac ended up 8.7% at 204.00p. Total shares ended up 2.6% at EUR36.42 in Paris.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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