March 15, 1977 - Maritime Reporter and Engineering News

Newport News To Build Four More LNG Carriers At Cost Of $800 Million

Tenneco's Newport News Shipbuilding, Newport News, Va., has announced it signed letters of intent that could lead to construction of four liquefied natural gas (LNG) carriers.

The world's largest shipyard signed the letters of intent with other Tenneco subsidiaries. The conventionally powered LNGs would operate as part of an LNG project proposed by Tenneco LNG Inc. and Sonatrach (the Algerian national oil and gas company).

The project contemplates delivery of LNG from Algeria to the east coast of Canada, where it will be regasified for sale in the Canadian markets and in the United States through Tenneco's interstate pipeline system.

The estimated final price of each LNG ship is approximately $200 million, including escalation.

Delivery of the first vessel would be scheduled for late 1981. Formal contracts for the LNGs, which the parties have agreed to develop, will be conditioned upon, among other things, obtaining all necessary governmental approvals of the project by September 30, 1977, in Algeria, Canada, and the United States, including approval by the Federal Power Commission and approval by the Maritime Administration of Tenneco's application for mortgage insurance.

(On February 1, Newport News Shipbuilding- signed a letter of intent with Globtik Tankers U.S.A.

that could lead to construction of up to three nuclear-powered oil tankers at $325 million each, subject to adjustment for cost escalation and certain other items. (See MARITIME REPORTER / Engineering News of February 15, 1977) The formal contract for those ships would also be subjected to a number of conditions, including the obtaining of all necessary governmental approvals and the availability of suitable insurance, governmental nuclear indemnity and financing. These two projects are unrelated.) In announcing the signing, A.O.

Winall, manager of commercial ship marketing and sales for Newport News, said: "The letters of intent covering these four LNGs as well as the letter we signed earlier for the nuclearpowered tankers underscore our company's commitment to aggressively pursue shipbuilding projects for our new commercial facility. We still have shipbuilding capacity available, however, and are presently looking at additional opportunities." Mr. Winall continued: "We have a large investment in our shipbuilding facilities and work force of skilled people, and we intend to keep both of these assets working to the fullest extent possible." Robert M. Bryant Jr., business manager of the Peninsula Shipbuilding Association (PSA), which represents the company's 16,000 production workers, added his support to the company's commercial marketing efforts: "The recent letters of intent that have been signed show that other people recognize what we in the PSA have known for a long time—we've got highly capable shipbuilders here. They can meet almost any challenge, and their skills can be put to work on Navy vessels or on commercial ships. We're all pleased by the company's actions in going after more commercial business and want to cooperate with management to ensure that the maximum number of jobs are available for our workers." If construction proceeds as planned, it is anticipated that these LNGs would be similar to the three LNGs currently under construction in the company's new commercial shipbuilding facility for El Paso Natural Gas Company. Each of these three ships measures 949 feet in length, with a 135-foot beam and a 36- foot draft, and has a capacity of 125,000 cubic meters of liquefied natural gas. Each vessel could carry the equivalent of 2.6 billion cubic feet of natural gas, enough to meet the needs of a city of 34,000 people for a full year. The first ship for El Paso was launched January 22, 1977, with deliveries scheduled for 1977 and 1978.

Located on the James River, Newport News Shipbuilding is a leader in naval shipbuilding and refueling, commercial shipbuilding and repair, and the supply of specialized products and services to the nuclear power generating industry. A major manufacturing complex employing approximately 24,000 men and women, Newport News Shipbuilding is Virginia's largest private employer.

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