with Ole Ingrish, Port Director, Port of Esbjerg
The municipality of Esbjerg purchased the port from the state shortly before you took over as Port Director in 2003. What was the strategy you set at the beginning of your tenure?
When I took over as port director in 2003, I was asked to develop a new strategy and a new master plan. The first year I took to develop this plan, together with the owner and the board.
We expected the North Sea offshore wind market to boom as England, Germany and the Netherlands launched ambitious programs with regard to offshore wind. Taking into account the positive development in our other areas of business, we were convinced that the demand for the facilities of the Port of Esbjerg would increase in future.
Our customers’ requirements and demand for capacity, access roads and infrastructure in general meant an increased demand for port facilities. In order to meet this demand, we launched a major expansion plan. Our master plan entailed investment of 1 billion Danish crones (150 million euros) spread out over a ten year period.
The existing port facilities are expanded through the construction of a new port section, the new East Port. This provides an additional 650,000 m2 and 1 km quays.
The expansion is based on the multi-purpose concept allowing hinterland and quays to be as flexible as possible and enabling the port to respond to changes in the demand. For the past decade, the multi-purpose concept has been essential to the positive development of the port’s business, and the port will apply the concept also in the future.
Major international players like Siemens have set up substantial business as a result of the expansion. As part of the expansion the port also built rig repair facilities, from which homegrown Semco Maritime is conducting their repair operations. In total we have received some 10 rigs since the opening in 2012.
Last year the Port of Esbjerg saw growth in all business areas and record-high earnings. Could you begin by outlining the significance of 2012 for the port?
It has been a fantastic year with growth in all different areas. There is full speed on offshore activities, while the classic freight also proceeded in an otherwise difficult market.
The harbor is home to some of the country’s strongest and most competitive industries and enterprises. Along with them, we are developing into one of the leading ports in the North Sea.
Net profit grew to 60.1 million crones, a new high for us. Revenue also sets record with 172.7 million, an increase of 10 percent compared to 2011.
What have been the key growth drivers for the port?
Over the past ten years wind energy has boomed. This transition from oil & gas into renewables is fantastic for the city.
Over the past decade the Port of Esbjerg has grown into a global hub not only for offshore wind but also for exporting wind turbines around the world. Denmark exports over 70 percent of the world’s wind turbines.
We have also a very good track record of installing wind parks offshore. All the key players are here and want to be here. Esbjerg has a wind cluster and we see many oil & gas companies moving into wind. There are a lot of synergies and the oil & gas industry sees major potential.
We had to upgrade the infrastructure in order to keep up with the industry. That was the defining strategic decision we had to take: would we follow on the wind industry that was cautiously developing, or should we leave it to competing harbors.
We had a dialogue with key players in wind such as Siemens and Vestas to discuss the kind of facilities they needed for the next generation of turbines. The weight of a turbine increased from 70 tons to 400 tons, and blades grew from 50 to 85 meters and are transported on trucks 100 meters long. It is a major challenge for the harbor to tailor to such rapidly changing demands for transportation, and our investments are in large made to keep up with these developments and be able to guarantee Esbjerg’s and Denmark’s leading position.
The port seems to strongly focus on developing its profile as an international wind hub – should the oil & gas industry fear that its interests will come second on the port’s priority list?
The oil & gas industry has no need to be worried. We have very good customers in the oil & gas industry, first and foremost the operators Hess, Dong and Maersk. The Danish government acknowledges the importance of the oil & gas industry to the Danish economy, especially at a time when many other sectors of the economy are impacted by the financial crisis.
Activity in the Danish North Sea related to the oil & gas industry is higher than it has been in many years. The main players on the Danish continental shelf are Maersk Oil with the DUC, Dong E&P, and Hess. All three are executing both new building and extensive modification projects on existing assets. Maersk Oil announced an 800 million USD investment at the beginning of April, while Hess entered the phase 3 development of their South Arne asset together with Dong, which means an investment of over 1 billion USD.
The Port of Esbjerg has made and continues to make the investments that the industry needs. Maersk is currently building a major office in the harbor, to be finished in 2015. That is a great signal that they believe in the future of Esbjerg.
Also we see a lot of synergies between offshore wind and oil & gas. The wind industry is much younger and can draw quite heavily from the offshore expertise that the oil & gas industry has developed over the past decades, but it also works the other way around. I recently had a meeting with one of the operators about decommissioning of oil & gas platforms in the North Sea, and they are working at using the jack-up installation ships of the offshore wind industry to use decommission oil & gas industry.
Dong Energy is a great example of a company that unites both industries: a successfully developing E&P sector and a world-leading position in offshore wind.
Where will we find the Port of Esbjerg in 5 years?
The future looks good. The outlook is one for a continued high level of activity in the offshore business. We will continue to provide the oil & gas industry with a good, cooperative and stable home here in the Port of Esbjerg, while we will further build up our profile as an international hub for offshore wind.
Recently Danish parliament decided that a third major wind farm will be constructed off the coast of Esbjerg over the coming years, which will create as many as 10.000 new jobs just in the building phase.
Furthermore, the current levels of investment in oil & gas seem to indicate that for decades to come, activities will continue to be sourced from Esbjerg.