Acquisition

RNS Number : 0264K

Scottish & Southern Energy PLC

12 April 2010

 



SCOTTISH AND SOUTHERN ENERGY PLC

ACQUISITION OF EQUITY STAKE IN BURNTISLAND FABRICATIONS LTD

SSE (Scottish and Southern Energy plc), has purchased a 15% stake in Burntisland Fabrications Ltd ("BiFab") for a total consideration of £11million.  In addition to the equity stake, SSE Renewables (the renewable development division of SSE) has secured an agreement with BiFab for the supply of at least 50 jacket substructures annually to support SSE's offshore wind developments.

BiFab is an established fabricator of structures and equipment for the oil and gas industry which has recently extended its expertise into the fabrication of jacket substructures suitable for offshore wind developments.  It operates three fabrication facilities in Scotland, two in Fife and one at Arnish Point in Lewis, Stornoway.  BiFab has already attracted government support to develop a new manufacturing facility for offshore wind jacket substructures.

SSE's investment will be used to further develop this facility and this is expected to expand BiFab's capabilities to a total annual capacity of up to 130 units. The investment follows BiFab's successful delivery of jackets for the Greater Gabbard offshore wind project and its much earlier collaboration with SSE/Talisman on the Beatrice offshore wind farm demonstrator project. BiFab is currently constructing 30 offshore structures for the Ormonde offshore wind project.

SSE has been awarded extensive offshore wind development rights as part of the Crown Estate's Round 3 and Scottish territorial waters offshore wind development programme.  SSE's capacity share of these developments totals 6GW.

SSE and RWE npower renewables are already developing the 500MW Greater Gabbard offshore wind farm in the outer Thames Estuary and in December 2009 SSE entered into an agreement with DONG Energy to acquire a 25.1% stake in the 367MW Walney offshore wind farm in the Irish Sea, which is expected to become operational next year.

Ian Marchant, Chief Executive of SSE, said: "SSE is committed to becoming a major participant in the offshore wind market, and our current developments and success in securing development rights from the Crown Estate underline this. 

"To realise our ambitions, it is essential that SSE is able to establish a reliable supply chain, particularly for those elements where manufacturing bottlenecks have already been identified as a significant risk. This investment in BiFab secures a reliable supply of offshore structures for our SSE Renewables business, from a manufacturer with a proven track record.  It also provides our SSE Ventures business with an investment in a high-potential growth industry. 

John Robertson, Managing Director at BiFab, said: "This is great news for all at BiFab. We have been promoting the vision of a mass manufacturing facility in the UK since 2008. We are very pleased and impressed with the proactive approach within the SSE management team and their strategy in ensuring a strong Scottish supply chain for their offshore wind projects.

"It is important that the UK manufacturing industry has the infrastructure and the ability to deliver to the market. The UK Round 3 licences can create huge employment opportunities for Scotland and the UK."

 

END

 

 

ACQUUOKRRBASARR