In a space of less than eight years, China has emerged as one of the leading constructors of offshore support vessels (OSVs), and yards across the country are now focusing on upping their technological mastery of this sector. “In the last seven and a half years, China has come from nothing to building 70% of the world’s OSVs,” Mike Meade, chief executive and managing director of Singapore brokers M3 Marine Group, tells Offshore Marine Technology. As with many other industry sectors, the ‘Made in China’ pricetag has been a major factor in the nation’s ascent, with Chinese yards offering prices as much as half of those in Europe.

Ulstein and Wärtsilä are currently among the most successful designers for OSVs in the territory. “China mainly plays a role as a builder of OSVs, but some leading yards, like Sinopacific Shipbuilding Group, have started to develop their own OSV designs,” says Zhang Guang Hao, business development manager for offshore China at class society Germanischer Lloyd (GL). While there have been a slew of OSV orders in the past two and a half years, overcapacity concerns are yet to surface, with M3’s Meade pointing out: “On the resale market, there is a 20% premium for prompt delivery.”

Analysis from Norway’s DNB Bank shows that long-term fixtures for platform supply vessels (PSVs) and anchor handling tug supply (AHTS) vessels in the active North Sea increased to 128 and 48 respectively in 2011, up from 114 and 29 in 2010. In the Asia-Pacific region, fixtures for PSVs and AHTS vessels also rose to 28 and 127 respectively, up from 27 and 107. Globally, the total number of PSVs on long-term fixtures increased to 233 last year, from 204 in 2010, and demand for AHTS vessels climbed year-on-year to 328, from 202.

Despite the demand and success of certain Chinese yards in the OSV field, it is unlikely that bigger yards will look to get in on the act, however, GL’s Zhang opines. “Although the price of OSVs is very high compared with containerships and bulk carriers of the same size, the profit margin for builders is not that high, with the cost of machines and equipment taking up most of the price,” he says. Additionally, the size of OSVs ­ normally between 50m and 80m in length ­ is comparatively small, which makes it less economic for larger shipyards, equipped with big docks, to build them.

Follow the floaters
China also has big plans when it comes to the manufacture of floating storage and regasification units (FSRUs). China National Offshore Oil Corporation (CNOOC) commenced construction of the China’s first floating LNG receiving terminal at Tianjin port on 29 February this year, and this project will see the development of a FSRU, another first of its kind for the country. The floating terminal will have a capacity to receive about 2.2m tonnes per annum, costing just under US$905 million, and it is expected to start operations in 2013, with a second phase of the project including a land-based LNG receiving terminal with an annual capacity of no less than 6million tonnes, which is expected to become operational around 2015. CNOOC’s debut construction is likely to be the start of many FLNG vessels from China, as land for full-scale developments becomes scarcer. Madeline Leong, a partner at law firm Watson, Farley & Williams, comments:“FSRUs are becoming more popular because they are easier and quicker to build. They take two years to build, while a terminal might take five years and is more expensive. You can also get floating storage units [FSUs] with regasification barges, and this is a cheaper alternative. In China it could be an answer to the overcapacity in the steel and aluminium sectors.” In July this year, Shanghai-based Wison Offshore & Marine won a contract from Exmar for the engineering, procurement, construction, installation and commissioning of the world’s first floating LNG liquefaction, regasification and storage unit (FLRSU). The facility will be used by Exmar under a ‘build, own, and operate’ contract with Pacific Rubiales Energy Corporation, and located on the Caribbean coast, offshore Colombia. Commercial operations will commence from Q4 2014. The FLRSU consists of a non-propelled barge, equipped to convert a daily rate of 1.97 million m3 of natural gas into LNG, which will be temporarily stored in onboard tanks with a total capacity of 14,000m3 and subsequently offloaded either to a permanently-moored FSU or to shuttle tankers. The facility will be moored to a jetty and supplied with gas by pipeline from the onshore La Creciente field, located in the Lower Magdalena Valley Basin. Wison Offshore & Marine will be responsible for the design and engineering of the unit from its Shanghai operational centre, with construction to be performed at Wison’s wholly owned fabrication facility, located in Nantong, China, and with further support supplied from the company’s subsidiary in Houston, US.