Edward Heerema – Founder and President, Allseas – Netherlands
The founder and president of Allseas discusses the future implications of the single lift market, and the coming projects that the world’s largest platform installation and decommission vessel, the Pioneering Spirit, will undertake, as well as several other ambitions that the company currently has in its pipeline—including the construction of an even larger vessel, the Amazing Grace.
When we met you five years ago, the Pioneering Spirit (PS) was still being built. What changes has this vessel, now ranked as the largest in the world, brought to Allseas?
Initially coming from the lifting discipline, I believed that a technological breakthrough would be the best way to find a foothold in the heavy lift market. We had the concept for PS floating around for almost 28 years, before possessing enough scale in terms of human capital, finances, and positive economic foresights, to bring it to life. So it remains something of a dream that we’ve managed to continue engineering through all these years.
The vessel is novel in every respect – with a lift capability of 48,000-tonne for topsides and 25,000-tonne for jackets, as well as a 2000-tonne tension capacity S-Lay pipelay system. The PS is not only large – at 382 meters long and 124 meters wide – but the idea of implementing motion compensation has never been done before. We also had to make the system versatile enough to accommodate a wide range of applications including large and small platforms, deep and shallow waters, jackets and topsides. To integrate such a degree of flexibility into every aspect of the design process creates its own challenges. Thanks to all efforts over the years, the Allseas team has been able to successfully execute this engineering feat and introduce the PS to the world
Since arriving in Rotterdam, what new and exciting projects has the vessel participated in or hoping to collaborate in?
The PS left Daewoo shipyard in Korea this past November and has since been located here in the Netherlands for final completion. Due to the complexity of the lift systems, we’ve experienced some delays with our suppliers and are only now in the process of installing the topsides lift system on the vessel. We are looking to fully commission the vessel by this fall and commence the first removal project shortly thereafter.
The vessel’s first project will be to lift the topsides of Talisman’s Yme platform in the Norwegian North Sea before removing the Brent platforms in the UKCS. The PS will also work on a three-platform topsides installation contract with Statoil on the Johan Sverdrup development in 2018 and 2019.
Overall, it is still too early to project the demand forecasts between installation and removal services for the vessel. The PS may only be commissioned for installation services in some years, while primarily decommissioning in others. Platform work, however, doesn’t take that much time and normally only occurs a few times a year at best. We’d be lucky to experience two or three heavy platform lifts a year, which is why we incorporated pipelaying capabilities within the PS to maximize the vessel’s utilization and day rates, and effectively weather short-term demand swings.
Given your love for building big boats, I expect we should see plans for a newer, even larger vessel soon. Allseas has announced its plans to build the Amazing Grace, a single-lift vessel larger than the PS and with topsides lift capacity that exceeds the PS by 50 percent. How do you assess demand when deciding whether to build new vessels, like the PS and this new mystery vessel?
When we conceptually designed the PS, we always realized that it would not be big enough for the largest and heaviest platforms in the North Sea. There’s a league of platforms so massive that the PS could never deal with them. So we always left those extreme projects outside our boundaries. Four or five years ago, we initiated many studies for our current and potential clients and realized that the benefit of single lifting, from a cost and time efficiency standpoint, is increasingly more valuable for larger lifts. We then could not resist the temptation of drawing up what the ship would look like if we could deal with those extreme platforms—giving birth to the concept of the Amazing Grace. We have a team meeting every two weeks to develop every aspect of the design. To be able to answer to the demands of such magnitude requires considerable ingenuity in the design and engineering and will likely incorporate technology that the rest of the industry does not have. But the primary limitation of the Amazing Grace is the fact that the installations or removals for platforms of that size run far and few—forcing us to settle with a lower utilization. The evaluation of these economics takes place in parallel with the designing. Nonetheless, the main challenge at this time is getting the technical solution right, and then getting a feel for its applications. We’re aiming to complete the construction of this vessel by 2021.
How do you view the North Sea market today, particularly in light of the decommissioning work that will be ramping up in the coming years?
The decommissioning industry will be interesting in the coming years, but it’s not a booming market. Big decommissioning projects might come along once per year, so it’s not something that many companies have a lot of work in, but it is certainly interesting and will go on. In new developments, the North Sea is much less active than it used to be. That being said, we’re looking to expand upon opportunities emerging in other regions such as the Gulf of Mexico, Brazil, and West Africa.
Last time we met, you also stated that the “Dutch are very ambitious people; they are good entrepreneurs with a lot of common sense and energy.” What special service offering contributes to the Dutch seal of excellence that you might not find elsewhere?
The combination of innovative spirit and entrepreneurial attitude gives the Dutch a unique positioning in the global market. Through years of reliable and quality service, the Dutch have developed a reputation that has positioned them favorably as a provider in technical capabilities and competency.
Do you have associations with the local universities to encourage flows of information?
The Netherlands has a good knowledge base, encompassing comprehensive education in a large spectrum of focus areas such as civil engineering, mechanical engineering, electrical engineering, naval architecture and applied physics. There’s very close cooperation between Allseas and Delft Technical University. Many students have decided to complete their final studies at Allseas—effectively allowing us to establish a fortified pipeline of quality talent. Giving back to the community and encouraging knowledge transfer, several of our staff give courses at the university. We’re also working in tandem with the technical universities in Enschede and Eindhoven, several vocational universities (hogescholen) such as in Rotterdam and The Hague, and the maritime institutes in Vlissingen and Terschelling.
How do you create a company culture that rewards imagination? Is imagination necessary at every step of the business for you?
Imagination is necessary at every step of the business, and at Allseas imagination is instilled top-down. Personally, I am always busy with technical innovation, and I radiate that mindset to all my people, making it very much integrated within every aspect of the culture here. A highly technically capable employee will be no less valued to this company than a good commercial salesman. Anyone with an aptitude for innovation and drive for learning is invited to sit at the table with me to discuss how to best bring innovation to the forefront.
Where do you see Allseas in five years?
Within the next five years, we’re looking to have the PS well established in the industry. In that time frame, we will also continue making significant headway on the Amazing Grace. We’re also prospecting other activities in the offshore industry that some might not have thought of yet. We’re not necessarily looking for a wide spread of activities, because we want to focus on leveraging our core capabilities when pushing forward—requiring us to look at the industry from a broader standpoint. Along those lines, we’re not seeking to acquire every company that comes along and become a conglomerate, but instead, refine our current proficiencies and push forward innovations in these domains. As Allseas is privately owned, we are able to constantly focus on achieving long-term success without near-sighted pressures from public investors.