Offshore Heavy Lift Services

Supply & Demand Dynamics

Demand 

The demand for heavy lift vessels is directly affected by offshore project developments in the oil and gas industry. In addition, offshore wind industry and global communication infrastructure (cable-laying) are significant users of heavy-lift crane vessels too but do not require large crane capacity. Yet, there are not too many vessels that are used by both industries interchangeably.  Offshore wind industry tends to have purpose-built wind turbine installation vessels.

The oil and gas industry requires large-size vessels and on many occasions, the design and size of offshore facilities are constrained by the vessel(s) available.

Offshore wind energy tends to use vessels that can transport, lift and install – which means large deck and fairly big crane. The largest vessel (yet to be built as of Q3 2020) is 5,000 tons, whereas in the oil and gas industry a 5,000-ton lift is fairly common. On average, 1,500 to 3,000-tonne crane vessel is suitable for a large majority of wind installations offshore.

Decommissioning of offshore platforms in the oil and gas industry is another significant demand driver. Due to technical aspects, very often platforms are removed as a “single piece”, hence tend to be very heavy and require a large lifting capacity.

The demand patterns for super heavy lift vessels and “normal” heavy lift vessels are fairly different too, whereby globally there are only 3 super heavy lift vessels with a lifting capacity of above 10,000 ton and multiple normal HLVs with lifting capacity below 3,000 tons.

Supply

The market for heavy lift and installation vessels is geographically clustered, with a fairly large majority of vessels used only in certain parts of the world due to 1) Water depth and size of projects/facilities, 2) Transit distance and time and 3) Weather windows. Yet, there are vessels that a “global” or cover wider geography and used for multiple purposes globally. Generally, those vessels tend to be with lower crane capacity (below 3,000 ton).

In addition, HLV vessels are generally owned by companies who specialize in marine installation and transportation business only, with very few EPC contractors who own HLVs.

The following companies and contractors currently operate Heavy Lift vessels around the world. The below list of HLVs consists of various type of vessels, i.e. dedicated crane vessels / floating cranes, multipurpose vessels with large cranes. The Heavy Lift vessels count is as of Dec 2020.

Key Players

Over the years, the market went through various cycles of consolidation, growth and bankruptcies. There is a solid segmentation in the market, between global and regional players, as well as fully integrated and not. Below is the list of major operators who provide Heavy Lift Services primarily using the crane installation method, i.e. special or multipurpose vessels with large cranes and whose core business is primarily the Oil and Gas industry. 

1. All Seas

2. Boskalis

3. COOEC

4. COES

5. Heerema

6. McDermott International

7. NPCC

8. TechnipFMC

9. Saipem

10. Subsea 7

11. Sapura Energy & L&T

12. Heerema

13. SAL Heavy Lift

Cost & Price Analysis

Price

Generally, day rates for HLVs are opportunistic and may not be driven by bottom-up cost approach. Driven by many factors, fleet utilization and financing being the key. In addition, many contractors are flexible (within limits) on day rates and can work on different rates, depending on what the vessel is used for. Many  HLVs, in particular below 3,000 ton capacity are multipurpose vessels or pipe-laying / cable laying vessels, hence may be used for other projects too and subject to utilization levels in those segments. In parallel, at times owners of large HLVs are willing to compete in the marker where lower capacity HLVs markets.

Day rates for heavy lift vessels range from $40k to $700k per day, depending on a variety of factors, such as vessel type, project duration, time of the year, the appetite for risk and jobs, fleet amortization and utilization, availability of roll-over projects and relationship with customers.

In addition, there is a tendency to charge lump sums on a project basis for the total tonnage to be lifted, instead of day rates for an HLV.