Final investment decision (FID) reached and shipyard engaged to build first Jones Act qualified incline fallpipe rock installation barge. Yesterday, a contract for $197 million was announced with Philly Shipyard, a publicly traded Norwegian company that is majority owned by Aker Capital. The goal is to construct the first Jones Act complaint vessel to assist in the installation of the wind turbine towers in US offshore areas beginning in 2025. The primary function of the rock dumping barge will be the placement of rock around the wind tower foundations for scour protection. The state of the art vessel will have all of the latest technology and should be well positioned to serve a growing market. Given the likelihood of government support (federal/state/local) for high local content on the construction of offshore wind farms, the outlook for this type of vessel appears promising.Payment schedule is favorable. The shipyard contract has attractive payment terms that spread out the significant capex commitment over the next three years. A deposit of ~$15 million (8%) will paid in 4Q2021 and the remainder will be spread out over the next three years, with ~$35 million (18%) in 2022, ~$80 million (41%) in 2023 and $67 million (33%) in 2024. Owner furnished equipment in the $20 million-plus range is expected to be spread out evenly over 2023 and 2024, with delivery slated for 4Q2024.Option on the second rock dumper barge expires in one year. While the capex is slightly lower at $185 million, the payments terms should be similar, which implies $14 million in 4Q2022, $33 million in 2023, $76 million in 2024 and $62 million in 2025. Owner furnished equipment in the $20 million-plus range would be spread out evenly over 2024 and 2025. If the option is exercised, delivery would be slated for 4Q2025.4Q2021 Bidding off to good start. Recent awards added to 4Q2021 backlog include South Atlantic Regional Harbor for $25.8 million (excluding options of $3.6 million) and the Oak Island Renourishment Project 2021/2022 of $17.1 million. Also, the Port Houston pending award of $95.4 million should be finalized shortly and add to 4Q2021 backlog. In addition, a large job near the Rockaways, New York and the second phase of work on the Houston Ship Channel are on the horizon. Read More >>