January 16, 2001

$65 million in new projects for FGH
Friede Goldman Halter, Inc.'s backlog is starting to build. Today it announced new projects with a combined value of more than $65 million. That takes the value of new projects announced by FGH since October 31, 2000 to over $587 million.

  • Vessel Management Services, Inc., of Seattle, Washington, has exercised the first of five options on its current contract with Halter Marine, Inc., for the construction of an additional 150,000-barrel, oceangoing, double-hulled articulated tug-barge (ATB). The barge will be built at Halter’s Gulfport shipyard and the tug at its Moss Point Marine shipyard, in Escatawpa, Mississippi.
  • *Halter Marine, Inc. has signed a contract with Bouchard Coastwise Management, Inc., of Hicksville, New York, for the construction of a 110,000-barrel, oceangoing, double-hulled articulating tug-barge (AT/B). This is the fifteenth boat and eleventh barge that Halter has built for Bouchard over the last 32 years. The 424-foot barge will be built at Halter Marine’s shipyard in Gulfport, Mississippi, and the tug at Halter’s Moss Point Marine shipyard, in Escatawpa, Mississippi.
  • Foss Maritime, Inc., of Seattle, Washington, has exercised the first of two options on its current contract with Halter Marine, Inc., for the construction of an additional 6,000 hp, 98-foot Z-drive harbor tug. The tug will be built at Halter’s shipyard in Lockport, Louisiana.
  • The FGH Engineered Products Group has received several contracts for offshore exploration and production equipment in the U.S. Gulf of Mexico.

"The visibility of projects that we are now adding in 2001-2002 is encouraging. The Halter Vessel business continues to execute new contracts and customers are signing contract options. We are announcing multiple projects, which allows us some diversification. The risk profile on option projects and multiple vessel contracts is a good strategy for our company’’, said John Alford, CEO of Friede Goldman Halter.

"In addition, the Engineered Products group continues to be successful in generating new contracts. We had anticipated a recovery in the Vessels and Engineered Product area in advance of the Offshore market.’’

EPA to regulate ship emissions
Environmentalist group the Bluewater Network says that In an agreement finalized Friday, the U.S. Environmental Protection Agency has pledged to establish emission standards for large sea-going vessels such as oil tankers, cruise ships, and cargo vessels. The settlement ends a lawsuit, filed by Earthjustice Legal Defense Fund on behalf of the Bluewater Network, challenging EPA's failure to set any standard for NOx emissions.

Dr. Russell Long, Director of Bluewater Network, said, "Oil tankers and cargo ships are huge contributors to global warming, smog, and airborne toxics both in port and at sea. It's absurd that the EPA has lowered the boom on virtually every type of vehicle and factory but the world's biggest polluters almost got off scot-free. We're tremendously relieved that this issue will finally be addressed."

The Clean Air Act requires EPA to establish regulations to reduce air pollution from non-automobile engines that significantly contribute to pollution in areas with poor air quality. Based on a 1991 study, EPA determined that the largest type of ship engines - called "Category 3" engines - were a "significant contributor" of important pollutants, including NOx.

EPA claimed it did not need to regulate these engines since they are covered by the MARPOL Convention. The Bluewater Network says the MARPOL emissions requirements are unlikely to take effect for some time. The relevant portion of the convention requires ratification by countries responsible for at least 50 percent of world shipping traffic. So far, says the Bluewater Network, only three nations, representing only 9 percent of the world shipping, have ratified. "Although the United States has signed the agreement, the Clinton administration never even asked
the Senate for permission to ratify it," says the environmentalist group.

In the settlement, EPA agreed to give Bluewater regular reports on its progress in establishing standards for Category 3 engines. The first report will be due in February of this year. EPA is to issue a proposed rule in April 2002 and finalize the standards in January 2003. In addition, if EPA's proposed standards are based on international trade concerns or any factors other than those the statute requires, it must provide Bluewater a detailed explanation of the impact of those factors on the final standard.

Chinese yards cut losses, build orders
China Shipbuilding Industry Corporation (CSIC) produced an industrial output of 11.8 billion yuan in 2000, up 9 percent on an annual basis, to reduce its losses by over 300 million, CSIC president Huang Pingtao announced last week, according to the People's Daily.

[$1 is worth about 8.275 yuan]

The company received orders valued 25.7 billion yuan last year, an increase of 102.4 percent, including shipbuilding orders worth 18.5 billion yuan and ship-repair orders worth 1.23 billion yuan, both doubling the orders in 1999, Huang told the corporation's annual working conference.

According to Huang, CSIC has significantly raised its market share over the past year, and currently it holds shipbuilding orders of 3.46 million tons, valued 29.3 billion yuan.

The CSIC, founded in 1999 and one of China's top two shipbuilding giants, also is the country's biggest enterprise for building military and civilian vessels, as well as maritime projects. It has 170,000 employees.

According to People's Daily, the other Chinese shipbuilding giant, China State Shipbuilding Corporation (CSSC) received 136 new orders valued 16.7 billion yuan in 2000, The corporation also acquired orders for 17 oceangoing ships from domestic clients last year, valued at 4.3 billion yuan, Chen Xiaojin, president of the CSSC said at the company's annual work conference.

CSSC includes the Jiangnan Shipyard Group, Hudong Shipbuilding Group and Guangzhou Shipbuilding International Ltd.and employs a total of 95,000 people.

According to Chen, the company generated an industrial output value of 12.06 billion yuan last year, an increase of 3.9 percent on an annual basis, including 7.5 billion yuan from exports, up 15. 4 percent. Total sales income stood at 13.24 billion yuan, up 2.3 percent year on year.
Currently, the CSSC holds in hand orders for 188 ships, which will take two to three years to fulfill. This indicates that China 's shipbuilding industry has overcome the negative effect of the Asian financial crisis, he said.

Kværner considers shipyard merger
Norwegian daily Aftenposten said last week that Kværner has expressed interest in a proposal by Kjell Inge Røkke's rival Aker group to merge Kværner's and Aker's shipyard operations.

"Kværner's main strategy has been to sell its shipbuilding division," the company's chairman Christian Bjelland told Aftenposten. "We've not yet reached that target. We're looking at alternative solutions and (Aker's) suggestion could be interesting." he said. But Bjelland would only go so far as to say the shipbuilding merger was one of several "possible scenarios".

Barge order for Bender
Bender Shipbuilding & Repair Co., Inc, Mobile, Ala., is to build a 150 ft x 60 ft 10,000 bbl capacity well test barge for the Hanover Company of Houston. To be constructed in four months, the barge will be equipped with pumping, generator and separation systems to perform its well test mission. It will be ABS classed and designed and built for international service.

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