February 6, 2001

Frontline on newbuilding spree
Over the past year, John Frederiksen's Frontline has been discussing a variety of newbuilding options with Korean and Japanese yards. Now it has signed a total of five newbuilding contracts.

Two Suezmaxes have been ordered from the Sasebo Shipyard in Japan for delivery in August and October 2001, and three VLCCs have been orderedf rom Hitachi for delivery in April, August and October 2002.

The total newbuilding project will have a cost of approximately $330 million.

The program will be paid for through what Frontline describes as "a competitive installment plan until delivery".

Frontline assumes that, in total, the five contracts in total will require less than USD 100 million in equity. This amount, plus the equity needed for financing of the 51 % of two Golar VLCCs being acquired by Frontline in a joint venture with OSG, is likely to be more than covered through Frontline’s free cash flow in the first quarter of 2001. It is not likely that any additional new equity or any additional cash will be needed to fund the newbuildings.

The three VLCC contracts were negotiated and entered into by Seatankers Management Co. Ltd., an affiliated party of Hemen Holdings. Seatankers has a long and close relationship with Hitachi.

The VLCC contracts have been transferred to Frontline based on a contract price of $72.5 million per vessel plus technical extras of approximately $1.2 million. Independent appraisals of the contracts by three shipbrokers indicate that Frontline is already $15 - 20 million to the good on the three contracts . The contract price of the Suezmaxes is some $6 million per ship lower than what has recently been paid for 2001 resale tonnage.

Frontline says it currently has no further plans to increase the size of its newbuilding commitment.

Keel laid for Jones PCTC
Halter Marine, Inc., Pascagoula, Miss.was recently the scene of the ceremonial keel laying for the first pure car truck carrier (PCTC) ever built in the United States.

The vessel, to be named JEAN ANN, is being built by Halter for Pasha Hawaii Transport Lines (PHTL), for service between the U.S. West Coast and Hawaii. It is being financed under the Title XI program and will be built in compliance with the Jones Act, enabling it to operate between U.S. ports, as well as in foreign trade.

Pasha Hawaii Transport Lines is a joint venture between The Pasha Group and Van Ommeren Shipping USA, which will operate the vessel. Halter Marine is the vessel construction business unit of Friede Goldman Halter, Inc.

 Speaking at the keel laying, Richard T. McCreary, President of Halter Marine, Inc. said: "This project is very important to Halter Marine, both because it represents our initial foray into the market for oceangoing cargo ships and because it christens the new 800-foot by 120-foot land-level shipbuilding facility in our Pascagoula shipyard.", said McCreary, the event's emcee. "We are very pleased that Pasha and Van Ommeren selected us for this project. Their confidence in us confirms our strategy of pursuing shipbuilding projects in multiple different market sectors. With the recent rationalization of our shipbuilding operations and a strengthening marketplace, we expect to be undertaking many more projects like this in the years ahead."

 Speaking for Pasha Hawaiian Transport Lines, Mr. George Pasha IV described the relationship with Halter as a partnership and complimented the shipbuilders on their progress to date. "We are very pleased with the way the project is going and have demonstrated this by exercising our option for a second ship", Mr. Pasha said.

 The 13,000 deadweight-ton ship measures 579 feet overall, with a beam of 102 feet and a design draft of 25 feet. It is designed to carry more than 4,300 vehicles on 10 decks. Propulsion will be provided by a single screw driven by a slow-speed diesel engine. The vessel will carry a complement of 23 and will be capable of maintaining a cruising speed of 20 knots. Construction will conform with Det Norske Veritas (DNV) standards and the vessel will be classed A1A Car Carrier upon delivery. Five vessels of essentially the same design have recently been delivered by a European shipyard, and two more are currently under construction.

SWATH keel laying scheduled
The keel for the U.S. Navy's newest auxiliary oceanographic research vessel will be laid on February 9. The ceremony will take place at Atlantic Marine's shipyard in Jacksonville, Fla..

The vessel will be named R/V KILO MOANA and will be designated AGOR 26. The ship incorporates small-waterplane-area, twin-hull (SWATH) technology developed by Lockheed Martin. The ship is unique because it has two submerged lower hulls connected by thin struts to the superstructure.

Compared to a conventional monohull or catamaran, SWATH design offers a much more comfortable ride, a substantial working deck area, and stable efficient operations in rough seas. The ship, weighing over 2500 tons, will be 182 feet long with an 88-foot beam.

The AGOR 26 i will be operated by the University of Hawaii for general-purpose oceanographic research. Lockheed Martin Marine Systems in Baltimore is the prime contractor. Atlantic Marine is the shipbuilder, and Guido Perla & Associates, Inc. is the naval architect.

The contract value is $45.3 million.

"The keel-laying rite marks a significant milestone because it initiates actual ship construction from certified drawings,'' said Dale Bennett, vice president and general manager of Lockheed Martin Marine Systems. "AGOR 26 is the first ship to be acquired using the government's new streamlined acquisition process. The program combines Atlantic Marine's reputation for quality and on-time delivery using commercial shipyard practices with Lockheed Martin's innovative hull design, integration capability and experience in government contracting.''

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