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AsiaElec: Sapura Energy issues termination notice to Yunneng Wind Power

Malaysia’s Sapura Energy has issued a termination notice to Yunneng Wind Power for a contract for the transportation and installation of monopiles at the Yunlin offshore wind farm in Taiwan.

The row centres on an alleged breach of contract after delays in the work involved, which has been pushed back from 2020 to 2023.

Sapura Energy's subsidiary Sapura Offshore was awarded the contract in March 2019. Sapura Energy said the project was initially expected to be completed in September 2020, but this was delayed to September 2023 because of unresolved technical and operational issues not attributable to Sapura Energy, which “significantly altered the basis of the contract”.

“Negotiations with Yunneng to remedy the breach began in November last year,” said Sapura Energy Group CEO 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.”

Sapura Energy said it would pursue its claims using the dispute resolution process prescribed in the contract, namely arbitration under the German Institution of Arbitration in Bremen. "As advised by external international counsels, Sapura Energy has an immediate right to legally and contractually terminate the contract," Sapura Energy noted.

Sapura Energy installed the first monopile at the Yunlin project in October 2020. In August 2021, Yunneng Wind Power said foundation installations for the Yunlin Offshore Wind Farm were "scheduled to be finalised in year 2021," and that the Yunlin Offshore Wind Farm was expected to be fully installed and commissioned by the first quarter of 2022. The wind farm, located about eight kilometres off the west coast of Taiwan at Yunlin County, is expected to have a total capacity of up to 640MW.