Aker Solutions, AF Gruppen Given Go-Ahead To Create Decom JV
The Norwegian Competition Authority (NCA) has not had any objections regarding the creation of a decommissioning joint venture between AF Gruppen and Aker Solutions.
Aker Solutions informed that the transaction was subject to due diligence and final board approvals, expected to be completed during the fourth quarter of 2021.
To remind, Aker Solutions and AF Gruppen signed the letter of intent to merge the two companies’ existing offshore decommissioning operations into a 50/50 owned company on July 1, 2021.
The merger will create a global player for environmentally friendly recycling of offshore assets and provide a significant contribution towards a sustainable, green transition of the offshore sector.
It is worth noting that the recycling of steel from decommissioned oil platforms represents a significant contribution to reducing greenhouse gas emissions compared with ordinary steel production.
The business concept is based on solving a significant societal challenge by removing and recycling decommissioned oil platforms. The unit aims to recycle as much of the materials from the decommissioned offshore platforms as possible.
Decommission of the offshore market has a vast untapped potential globally, with approximately 10,000 operational platforms. The North Sea alone holds a significant potential with an expectancy of more than 900,000 metric tons of top deck to be removed during the period from 2020 to 2029. This applies to the British, Norwegian, Danish, and Dutch sectors.
As for AF Offshore Decom, it managed to achieve a source separation rate of 94 percent for the recycling of structures where the main component is metal. Reusing steel results in 70 percent less CO2 emissions than ore-based production, which corresponds to an emission reduction of 1 kg CO2 per kilo of recycled steel.
According to Aker Solutions, it will take operators approximately 100 years to deplete liabilities for current assets. Thus, a further ramp-up of pace is necessary, leading to a positive contribution to the demand for this type of service. The joint company will have an order backlog of approximately $292 million.
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