February 1977 - Maritime Reporter and Engineering News

Newport News Signs Letter Of Intent To Build 600,000-DWT Nuclear-Propelled Tankers

The largest shipyard in the United States has signed a letter of intent which could lead to construction of the world's largest nuclear-powered commercial vessels.

Tenneco's Newport News Shipbuilding and Ravi N. Tikkoo, chairman of the board of Globtik Tankers U.S.A., have signed a letter of intent for construction of up to three 600,000-deadweight- ton nuclear-powered oil tankers. Globtik Tankers U.S.A.

is a member of the Globtik group of companies, which are owned by Mr. Tikkoo. Mr. Tikkoo also owns two of the world's largest tankers of approximately 483,000 deadweight tons, which have been operating most successfully since their delivery in 1973.

The current estimated base price of each vessel is $325 million, not including escalation.

Each nuclear-powered ultra large crude oil carrier (ULCC) would be 1,303 feet in length, 240 feet in breadth and have a draft of 89.5 feet with a service speed of 18.5 knots at 110,000 shaft horsepower. Each ship would have twin screws and a double bottom, and be designed to meet or exceed all the latest IMCO marine pollution standards to carry safely approximately four million barrels of crude oil— enough to satisfy the energy needs of a city the size of Baltimore, Md., for one month. (The United States today imports about seven million barrels of oil per day.) These ships would be delivered toward the end of 1985, 1986 and 1987. It is proposed that the vessels would carry crude oil from the Arabian/Persian Gulf to the offshore U.S. terminals which are proposed for completion in 1979/1980. These tankers could also bring oil to the United States from the Arabian/Persian Gulf via the Caribbean large port transshipment terminals which are already in existence.

A formal contract between Newport News and Globtik, which the parties have agreed to develop, is subject to several factors, including favorable action by governmental regulatory agencies and the availability of suitable insurance, indemnification and financing.

A formal contract also anticipates U.S. adoption of cargo preference legislation, which would guarantee that some portion of U.S. waterborne commerce be carried in American-flag ships.

The nuclear-powered ULCCs would fly the U.S. flag.

(At present, the U.S. has no national cargo policy. As a result, American ships carry only about 5 percent of the nation's waterborne foreign trade. In contrast, nearly every other major seafaring nation has some form of cargo preference. Japan, for example, requires that 50 percent of imports be shipped in Japanese vessels, and France has set a 30 percent minimum.) The basic configuration of the ULCCs covered in the letter of intent is based upon design, engineering, safety and economic feasibility studies conducted by Newport News Shipbuilding under a Department of Commerce study undertaken in conjunction with the Maritime Administration (MarAd). Recently completed and submitted to MarAd for review, the comprehensive five-volume study details the shipbuilding project, from specifications and preliminary design to ship safety and cost/benefit analyses.

Newport News Shipbuilding has been involved with nuclear construction and refueling for more than 20 years and has built more than 30 nuclear-powered vessels for the U.S. Navy. It also is involved through its own subsidiary, Newport News Industrial Corporation, with land-based nuclear-power generating plants.

Newport News Shipbuilding has also been involved for about three years with Babcock & Wilcox and General Electric in an informal "team" approach to study the application of standardized nuclear propulsion systems to merchant ships. Technical feasibility of commercial marine nuclear propulsion was demonstrated by the construction and successful operation in the early 1960s of the nuclearpowered merchant vessel N/S Savannah, a U.S.-flag ship.

In addition, Newport News has recently assisted Babcock & Wilcox, the proposed supplier of the consolidated nuclear steam generator (CNSG) for the proposed new tankers, with a proposal to the Canadian Government for the supply, installation, test and evaluation of a CNSG for a Canadian icebreaker. Babcock & Wilcox has participated with MarAd since 1970 in the development of a standardized nuclear propulsion system based on the CNSG.

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