Malaysia’s Sapura Energy Berhad has issued a termination notice to Yunneng Wind Power Co., Ltd. related to a contract for the transportation and installation of monopiles at the Yunlin offshore wind farm in Taiwan.
The company’s wholly-owned subsidiary, Sapura Offshore Sdn Bhd, was awarded the contract in March 2019.
Sapura said that the project was initially expected to be completed in September 2020, but completion was delayed to September 2023 following unresolved technical and operational issues that are said not to be attributable to the company.
According to the Malaysian offshore services company, these changes significantly altered the basis of the contract.
Sapura installed the first of the eighty monopiles at the 640 MW Yunlin wind farm in December 2020. This was Sapura’s first venture into offshore wind.
We currently do not know how many monopiles have been installed at the site so far.
Sapura Energy said the company has an immediate right to legally and contractually terminate the contract, based on advice received from external international counsels.
”Negotiations with Yunneng to remedy the breach began in November last year,” said Sapura Energy Group CEO Datuk Anuar Taib.
”Since we exhausted all avenues for an amicable solution, we made the tough decision to terminate the contract in the best interest of the Group.”
Following the termination notice, Sapura Energy said it will pursue its claims via the dispute resolution process prescribed in the contract, namely arbitration under the German Institution of Arbitration in Bremen, Germany.
Located in the Taiwan Strait some eight kilometres west of the coast of Yunlin County, the Yunlin wind farm will comprise 80 Siemens Gamesa 8 MW wind turbines. The wind farm was initially scheduled to be commissioned by the end of 2021.
Yunlin is owned by wpd (48 per cent), EGCO Group (25 per cent), and a Sojitz Corp-led consortium (27 per cent) which also includes Chugoku Electric Power, Chudenko Corporation, Shikoku Electric Power, and JXTG Nippon Oil & Energy Corporation.
The wind farm delivered its first power to the Taiwanese grid in November 2021.
Wpd told offshore WIND that the company has no comment on the termination notice.
NOTE: The article has been updated.