Oil and gas sector turbulence cuts costs for tidal projects

The vessels used to install the cables and turbines for tidal projects are the same as the vessels used by offshore oil and gas industry, and due to decline in the drilling activities in offshore oil and gas, tidal projects can benefit from these events.

Proactiveinvestors reports that the drop in the drilling activities in UK’s North Sea caused the reduction in day rates for offshore contractors, as well as under-employment in the sector.

The experts have predicted significant capex (capital expenditure) savings due to these circumstances, as well as increased competitiveness in the market for the contractors.

When it comes to tidal projects, MeyGen tidal project developed by Atlantis, located off the northern coast of Scotland, is well positioned to take advantage of the current situation in the offshore oil and gas sector.

Recently, Atlantis announced that the company started horizontal directional drilling operations at the MeyGen tidal site in Caithness that will create the bores for the cables which will connect the onshore site at Ness of Quoys with the four subsea turbines planned for the Phase 1A of the project.

“Nobody wants to see a downturn in any industry, but our industry sees direct benefits derived from low oil prices. First of all, one of our largest CAPEX costs is construction vessels, we use vessels to install our turbines and our cables and they’re exactly the same vessels used by the offshore oil and gas industry.

“There has been a significant reduction in day rates, and also a huge increase in the available fleet. So that it obviously a very big positive, in terms of the financials for our project.

“Secondly there is a huge pool of talent now, obviously as we continue to expand our project delivery team we’re seeing the pool of talent and the quality is incredible. So we’ll benefit on both the capex and opex side,” Tim Cornelius, CEO of Atlantis Resources was quoted as saying by Proactiveinvestors.

Construction of the first phase of the MeyGen project is expected to take place throughout 2015 and 2016, with first power being delivered to the grid for sale in 2016.

Proactiveinvestors is an international news wire providing in-depth coverage of the world’s growth companies.

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Image: Atlantis Resources