Torch
update on conversion of Midnight Express
Posted: 1 April 2004
Torch Offshore, Inc announced the conversion project of the Midnight
Express is in its final stages.
The Company has spent $90.0 million to date of the total of approximately
$109.0 million to be expended on the conversion project. The Midnight
Express, the Company's 520-foot DP-2 deepwater capable pipelay vessel,
is being converted at Davie Maritime, Inc. in Quebec, Canada, and
is over 90 per cent complete and expected to leave the shipyard
on May 21, 2004.
The patented pipelay system that is being constructed by Huisman-Itrec
and the 500-metric ton crane constructed by Hydralift AmClyde, Inc.
are essentially completed and ready for installation on the Midnight
Express.
Upon leaving the shipyard, the Company's patented pipelay system
and crane will be installed and the vessel will then undergo final
sea trials.
The Company expects the vessel will enter the active fleet in the
latter part of the third quarter of 2004.
The Company said the response to the Midnight Express has been
very positive and several customers have shown strong interest in
utilizing the vessel.
The Company is currently pricing various jobs to lay pipe in the
Gulf of Mexico in the fourth quarter of 2004 and internationally
in 2005 with the vessel. Management of the Company has been actively
marketing the vessel to customers throughout the world by presenting
the patented pipelay technology at conferences in Houston and Amsterdam.
Furthermore, management of the Company has made personal visits
to various operators and contractors and hosted customer visits
to the patented pipelay system at Huisman-Itrec in the Netherlands
and to the vessel in Quebec, Canada.
Lyle G. Stockstill, Torch Offshore, Inc. Chairman and Chief Executive
Officer, commented, "As for the utilization of the vessel,
the future continues to look bright as we have been speaking in
detail with several customers to use the vessel in deepwater pipelay
mode. In fact, we are working closely with a customer to utilize
the vessel in the Gulf of Mexico as soon as sea trials are complete.
We have been quite happy with the response to the vessel from our
customer base both domestically and internationally."
The $109.0 million cost to complete the conversion of the Midnight
Express is approximately 20 per cent higher than the earlier cost
estimate of $90.0 million at March 31, 2003. Approximately $5.0
million of this cost overrun relates to the devaluation of the U.S.
dollar against the Euro. Of the remaining $14.0 million, $11.6 million
resulted from increases at the Davie Maritime, Inc. shipyard and
the balance consisted of additions and upgrades of equipment, increased
supervision and management costs due to the 5-month extension to
the conversion project and increases in equipment installation costs.
"We consider the cost overruns on the conversion of the Midnight
Express to be relatively normal for a vessel conversion of existing
equipment and of this size. We are proud of our engineering staff
for keeping the costs to a relative minimum," added Stockstill.
Established in 1978, Torch Offshore, Inc. is involved in offshore
pipeline installation and subsea construction for the oil and natural
gas industry. Torch Offshore, Inc. is expanding beyond its established
shallow water niche market in order to serve the industry's worldwide
growing needs in the deep waters.
For more information see http://www.torchinc.com/
Posted by Richard Price,
Editor Pipeline Magazine
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