MOL grabs bigger stake in MODEC to bolster offshore energy game as decarbonization age goes on

Japan’s shipping giant Mitsui O.S.K. Lines (MOL) has taken hold of a larger slice of a compatriot floating solutions player’s ownership cake, which will enable it to convert MODEC into an equity-method affiliate in pursuit of further growth in both firms’ offshore businesses against the backdrop of energy transition plays that call for a step-up in the decarbonization arena.

MOL has now increased its stake to 15% in MODEC, which has been engaged in the offshore oil and gas development industry’s entire process from engineering, procurement, construction, and installation (EPCI) of floating production, storage, and offloading (FPSO) systems to long-term leases and operations and maintenance (O&M) for more than 20 years.

As the Japanese shipping major has been focused on the potential of offshore resources and energy, it joined forces with MODEC in the FPSO business to contribute to the stable energy supply. MOL intends to make the floating solutions provider an equity-method affiliate, thanks to the acquisition of 89,500 shares of its common stock and the 10,162,300 shares already acquired in June 2023 through a third-party allotment of new shares.

While the firms signed a business alliance agreement at the time, the additional shares are set to build stronger ties between the two companies to further develop both players’ offshore businesses in the era of decarbonization.

“Future cooperative moves, not limited to the FPSO business, will bring together MODEC’s world-leading technology in hydrographic condition analysis and design of floating structures and moorings and MOL’s long-standing expertise in offshore solutions,” explained the shipping giant.

MOL expects to strengthen its relationship with MODEC as a strategic partner with this acquisition while also mutually leveraging its management resources to enhance the competitiveness of the offshore business.

The additional stake in MODEC comes shortly after the Japanese shipping major joined others in a study that looks into dung power as a way to tap into the production and utilization of biomethane from animal manure.

Meanwhile, MODEC recently got its hands on DNV’s approval in principle (AiP) for Abate notation, enabling its newly built Brazil-bound FPSO to become the world’s first unit of this type to sport such a notation.