THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, March 19, 1995 TAG: 9503180244
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 58 lines
Once Newport News Shipbuilding establishes itself as a commercial shipbuilder in the tanker market, it intends to take aim at some more lucrative shipbuilding niches.
It plans to go after the market for liquified natural gas carriers next, said Edward Waryas Jr., the shipyard's director of commercial marketing.
These vessels, known as LNGs, can cost up to $250 million each. Newport News has the licenses for all the gas-containment designs available. The fact that its parent, Tenneco Inc., is a giant in the natural gas industry helps.
The shipyard has assembled part of a containment system just to show it can, Waryas said.
Industry sources have said that Newport News may be bidding on a contract to build LNGs for a gas company in Qatar, a small nation in the Persian Gulf region.
It's also bidding on a contract to build two shuttle tankers for a Canadian oil company. Newport News is making the bid with South Korean shipbuilding power Samsung.
Using a Samsung design, Newport News would build one of the $100 million, 120,000-ton crude carriers, and Samsung would build the other.
The Canadian company, Hibernia Lifting, a joint venture between the Canadian government and U.S. and Canadian oil companies, had been expected to make a decision by the end of April, Waryas said. Now it looks like it might take up to two months more.
Even further out on the shipyard's long-term commercial shipbuilding agenda is building cruise ships, Waryas said.
The last commercial passenger vessel Newport News built was the United States, launched in 1957, and that grand ship was a high-speed liner rather than a cruise ship.
Many of the skills that went into passenger-ship construction have been lost to Newport News in the intervening years. Building a cruise ship from scratch would be a costly venture.
The shipyard is more likely to partner with a European yard that builds cruise ships to relearn the business, Waryas said.
It may not try to enter that business until after the turn of the century, but it's already on the bidder's list for one major cruise-ship deal, Waryas said.
Walt Disney Co.'s Disney Cruise Lines plans to order a $350 million, 2,400-passenger cruise ship this summer for delivery in 1998. It's not clear whether Newport News Shipbuilding is even in the running for the contract. Waryas said the shipyard is just not price-competitive in that market yet.
``Before you get involved in a high-value ship, you better get your act together or you could lose your shirt,'' Waryas said. MEMO: Related stories on page D1.
KEYWORDS: NEWPORT NEWS SHIPBUILDING COMMERCIAL SHIPBUILDING by CNB