Prompted by a sluggish offshore oil and gas industry, the Oslo-listed ship owner Deep Sea Supply PLC has decided to look for profits elsewhere as it entered into an agreement with Norwegian seafood company Marine Harvest to establish a 50/50 owned aquaculture shipping joint venture.
According to the companies, the JV would build, own and operate aquaculture vessels, as “there is significant room for efficiency improvements across the value chain in aquaculture shipping, ranging from reduction in newbuilding cost to more cost-efficient operations.”
The JV expects to enter into contracts for the construction of aquaculture vessels which would be chartered by Marine Harvest upon delivery.
Current discussions indicate a substantial reduction in newbuilding cost compared to solutions provided by alternative aquaculture providers, the companies said. The JV entity, which will be Marine Harvest’s preferred provider of aquaculture vessels, would also compete for external contracts.
The joint venture would enter into management agreements with Deep Sea Supply covering all necessary management services for the JV, including technical management, ship management and other corporate services.
“The JV will explore any opportunity that may improve building cost or operating cost, including taking advantage of the current imbalance in the offshore service vessel market through potentially convert surplus offshore vessels into aquaculture vessels if project economics are favourable,” Marine Harvest said.
Through the joint venture, Marine Harvest, which today charters 44 vessels with a combined cost of approximately EUR 100 million per year, aims to reduce costs related to vessel services.