Kawasaki Heavy Industries (KHI) has decided to terminate the shipbuilding contract for Island Offshore’s top hole drilling/light well intervention vessel, Island Navigator.
Island Offshore ordered the vessel with equipment and capacity to perform a series of complicated subsea- and well operations from Kawasaki back in 2015. The delivery was planned for 2018/2019.
According to Island Offshore’s statement on Tuesday, December 26 the yard stated that is has been facing difficulties in its engineering process as well as with increases of material costs since the contract was signed.
Island Offshore further said that, combined with a common understanding that the environment surrounding the offshore development industry is, and will be, severe and unpredictable in the period of the vessel’s remaining construction, and the ongoing financial restructuring of the Island Offshore Group, KHI and Island Offshore reached a mutual agreement to terminate the shipbuilding contract for the vessel.
Namely, Island Offshore in late 2016 initiated discussions with its finance providers and thereby decided to temporarily halt all payments of amortization to its secured finance providers.
Meanwhile, Kawasaki Heavy is withdrawing from the offshore structure sector and The Island Navigator was supposed to be its final construction when it comes to that side of business.
“The Island Navigator would have been a fantastic vessel. Going forward we choose to develop our existing Light Well Intervention vessels which still is the leading and most modern vessels within its niche,” says Håvard Ulstein, Managing Director of Island Offshore Management.
Island Offshore concluded that the termination will not have any negative economical consequence for the company. Provided that the banks which finance the project consent, the termination will be implemented in January 2018.
Offshore Energy Today Staff