THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, May 17, 1995 TAG: 9505180901
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: Long : 109 lines
Newport News Shipbuilding, continuing its climb back into the commercial shipbuilding business, said Tuesday that it signed a letter of intent to deliver as many as 10 double-hull oil tankers to a Dutch-owned shipping company.
The contract, if finalized, would be the largest of three commercial shipbuilding agreements signed by the shipyard since last October.
All told, the three deals could mean as much as $750 million in revenues for the yard and keep 1,500 or more employees busy during the peak of construction in the next few years.
The latest agreement, with Van Ommeren Shipping (USA) Inc. of Stamford, Conn., calls for Newport News to build five of its so-called Double Eagle tankers. The letter of intent also gives Van Ommeren an option for five more of the 600-foot ships.
John Love, marine superintendent and general counsel for Van Ommeren, said the agreement would mark the first time the company, a unit of Koninklijke Van Ommeren NV of the Netherlands, had ships built in the United States.
But he said the company gained first-hand experience with Newport News two years ago when a roll-on/roll-off ship of which it is a part owner was converted from the French to the American flag.
``That was a very positive experience,'' Love said. ``We're very anxious to come to Newport News again.''
The deal with Van Ommeren depends on the U.S. Maritime Administration guaranteeing a loan to finance construction.
The federal agency said Van Ommeren asked for a loan guarantee of $203.9 million of the total estimated construction cost of $233.7 million for the first five ships.
Executives of Newport News and Van Ommeren declined to say what the total contract, including the five optional vessels, was worth. But sources in the maritime industry said it's likely to be in the $450 million range.
Ed Waryas, Newport News' director of commercial marketing, said the Van Ommeren contract is a major step for the yard as it tries to replace some of the waning Navy shipbuilding and ship-repair work that has sustained it for the past two decades.
That decline has forced Newport News to slash its work force from a peak of more than 30,000 in the mid-1980s to about 19,500 today.
``Obviously, we want to build as many commercial ships as we possibly can to help fill the hole that's left by submarines going away,'' Waryas said.
But he pointed out that commercial shipbuilding is far less labor-intensive than Navy work. Thousands work building an aircraft carrier. An estimated 200 to 300 will work on each commercial tanker.
Waryas said as many as six tankers will be under construction simultaneously between September, when fabrication for the first is to begin, and December 1998, when the majority are expected to be delivered.
Newport News Shipbuilding, continuing its climb back into the commercial shipbuilding business, said Tuesday that it signed a letter of intent to deliver as many as 10 double-hull oil tankers to a Dutch-owned shipping company.
The contract, if finalized, would be the largest of three commercial shipbuilding agreements signed by the shipyard since last October.
All told, the three deals could mean as much as $750 million in revenues for the yard and keep 1,500 or more employees busy during the peak of construction in the next few years.
The latest agreement, with Van Ommeren Shipping (USA) Inc. of Stamford, Conn., calls for Newport News to build five of its so-called Double Eagle tankers. The letter of intent also gives Van Ommeren an option for five more of the 600-foot ships.
John Love, marine superintendent and general counsel for Van Ommeren, said the agreement would mark the first time the company, a unit of Koninklijke Van Ommeren NV of the Netherlands, had ships built in the United States.
But he said the company gained first-hand experience with Newport News two years ago when a roll-on/roll-off ship of which it is a part owner was converted from the French to the American flag.
``That was a very positive experience,'' Love said. ``We're very anxious to come to Newport News again.''
The deal with Van Ommeren depends on the U.S. Maritime Administration guaranteeing a loan to finance construction.
The federal agency said Van Ommeren asked for a loan guarantee of $203.9 million of the total estimated construction cost of $233.7 million for the first five ships.
Executives of Newport News and Van Ommeren declined to say what the total contract, including the five optional vessels, was worth. But sources in the maritime industry said it's likely to be in the $450 million range.
Ed Waryas, Newport News' director of commercial marketing, said the Van Ommeren contract is a major step for the yard as it tries to replace some of the waning Navy shipbuilding and ship-repair work that has sustained it for the past two decades.
That decline has forced Newport News to slash its work force from a peak of more than 30,000 in the mid-1980s to about 19,500 today.
``Obviously, we want to build as many commercial ships as we possibly can to help fill the hole that's left by submarines going away,'' Waryas said.
But he pointed out that commercial shipbuilding is far less labor-intensive than Navy work. Thousands work building an aircraft carrier. An estimated 200 to 300 will work on each commercial tanker.
Waryas said as many as six tankers will be under construction simultaneously between September, when fabrication for the first is to begin, and December 1998, when the majority are expected to be delivered. ILLUSTRATION: Graphic
OTHER DEALS
Two previous double-hull tanker agreements were with:
American Marine Tankships, Weehawken, N.J., a letter of intent
worth more than $200 million last March to build up to six vessels.
Eletson Corp. of Piraeus, Greece, a contract with options worth
up to $152 million last October to build as many as four ships.
by CNB