Teekay Offshore is to take a hit of US$43.7 million after cancelling construction contracts for two flotels, described by Teekay as units for maintenance and safety (UMS).
The firm also says it suffered a drop in income due to its Arendal Spirit UMS going off hire for 71 days in Q2 this year as a result of damage suffered to the unit's gangway.
Teekay entered the flotel market in 2014, when it bought Logitel. The firm had two cylindrical hulled accommodation units, able to house up to 500 people each, in build at Cosco in China at the time. Arendal Spirit, built to a Sevan cylindrical design, was delivered in 2015 and started a three-year charter contract with Petrobras in Brazil the same year.
In April 2016, during the process of lifting the gangway connecting the Arendal Spirit to a floating production, storage and offloading unit, the Arendal Spirit's gangway suffered "extensive damage." The gangway was replaced, by using the gangway of another unit, Stavanger Spirit, which was in the process of being built and was being transported to Brazil earlier this year, and Arendal Spirit returned to operations in early-July 2016.
According to Teekay's Q1 results in 2015, Logitel had two UMS newbuildings, Stavanger Spirit and Nantong Spirit, scheduled to be delivered in Q1 and Q4 of 2016 respectively, for a total cost of about US$404 million. However, Logital had an option to defer the delivery of the units by up to one year, which was exercised. Earlier this year, Teekay was in discussions to further defer their delivery to late-2019.
Logitel had options to order up to an additional five UMS newbuildings from the COSCO shipyard.
The flotel market has tanked amid the oil price crash. Accomodation unit specialist Prosafe recently announced plans to scrap three and cold stack other units.
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