2001 Maritime

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Biloxi, MS, June 5 & 6

June 1, 2001

Navy delays DD21 decision
The Navy said yesterday that it is delaying source selection for the DD 21 program "to take advantage of the results of the ongoing reviews being conducted within the Department of Defense."

"This is a significant program approaching a significant milestone," said Under Secretary of the Navy Robert B. Pirie, Jr. "As we continue to look at how the Navy will be shaped in the 21st century by participating in the ongoing strategic reviews, it is only prudent to ensure DD 21 reflects the results of those reviews."

Those reviews include the Secretary of Defense's defense strategy review, the Quadrennial Defense Review, and a recently chartered future shipbuilding review being led by the Under Secretary of Defense (Acquisition, Technology and Logistics), E.C. "Pete" Aldridge.

The two competing DD 21 teams will continue their system development efforts under the Fiscal Year 2001 Phase II contract. This work will focus on continued development of critical DD 21 technologies and reducing program risk.

The "Blue Team" is led by Bath Iron Works with Lockheed Martin Government Electronic Systems, Moorestown, N.J., and the "Gold Team" is led by Ingalls Shipbuilding, with Raytheon Systems Co., Falls Church, Va.

Yesterday, the DD 21 Alliance, comprised of Bath Iron Works Corp. and Ingalls Shipbuilding, was awarded a $7,067,996 firm-fixed-price contract modification for the definitization of an advance agreement for the extension of the DD 21 Phase II period of performance.

By extending the Phase II period of performance, the government will allow DD 21 design and development efforts to continue until the start of Phase III.

Bath Iron Works Corp. has been selected by the DD 21 Alliance to lead the alliance and execute this modification. Work will be performed by both the Blue Team and the Gold Team is expected to be completed by May 31, 2001. Contract funds will not expire at the end of the current fiscal year. The Naval Sea Systems Command, Arlington, Va., is the contracting activity (N00024-98-9-2300, modification 0036).

Bergesen expands LNG activities, sells four VLCC's
Norway's Bergesen d.y. has decided to exercise an option to build a third LNG-carrier of 138.000 cu.m at Daewoo, for delivery in third quarter 2004. The contract price is about $160 million. Bergesen has also gotten a new option, to contract a fourth LNG-carrier at Daewoo, for delivery in 2005.

Bergesen exercised its option to build a second LNG-carrier of 138.000 cu.m at Daewoo last November. That ship is scheduled for delivery in second quarter 2003. The contract price was about $155 million. Bergesen has now concluded a minimum 20 year charter contract for the vessel with Cabot LNG, LCC. The charterer has an option to extend the charter contract by maximum of 9 years. This follows Bergesen's earliercharter contract with Cabot LNG for its first LNG-newbuilding at Daewoo. Cabot LNG is a subsidiary of Tractebel. Tractebel has guaranteed the obligations of Cabot LNG under the charter contract.

Tractebel has a 49% ownership stake in the first Bergesen newbuilding at Daewoo and has been offered a similar stake in the second ship.

In a separate deal, Bergesen has reached a preliminary agreement to sell the tankers Berge Ariake and Berge Sakura and the newbuilding contracts for an additional two tankers. The agreement has been reached with a consortium of partners in Tankers International led by Frontline Ltd.

The four tankers were part of a series of eight tanker newbuildings that Bergesen acquired from the Hitachi-yard in Japan in January 2000. The tankers are of 296.000 dwt. The sold tankers and newbuilding contracts will be delivered to the buyer in June/July 2001.

The agreement is subject to buyers' board approval.
The combined sales price for the two existing tankers is $164 million, and for the two newbuilding contracts is $157 million.

Bergesen says the deal is in line with its strategy for its tanker business, which to actively buy and sell tonnage in order to obtain a return in excess of what is obtained from operating activities.
Bergesen will book a profit on the sale of about $42 million.

Berge Ariake and Berge Sakura were delivered to Bergesen at the end of January and end of March this year respectively. Since owning them, Bergesen has had an operating result of about $ 8 million from the pair. Its total profit from its investment in the two tankers and two newbuilding contracts will thuis be about $50 million.

Kongsberg to supply Santa Fe with rig systems
Kongsberg Simrad Inc., Houston,has today received a letter of intent from Santa Fe International Corporation, Dallas, for supply of complete integrated control and monitoring systems for two deepwater semis on order from Singapore's PPL

The systems include

  • Power Management systems,
  • Dynamic Positioning and Mooring assist Systems (Triple Redundant + Backup)
  • Ballast/Bilge Control
  • Safety Systems, (Fire & Gas detection and Emergency Shutdown System)
  • Thruster Controls
  • Acoustic Positioning System (HiPAP 350)

The value of the scope of supply is about $10.6 million.

Warnow gets orders
Kvaerner Warnow, Rostock, Germany, has secured two newbuilding contracts worth a total of $68 million from Oskar Wehr KG (GmbH & Co.), of Hamburg. The yard already has four similar vessels on order from the same customer.

The two latest ships - which are of the Warnow CV 2500 design – are due for completion in the third and fourth quarters of 2002.

With these two contracts, the order backlog for container vessels at the German yard now numbers seven, all of which have been ordered by domestic shipowners. Between 1997 and 2001, Kvaerner Warnow delivered six vessels of the same basic design.

The type CV2500 container vessels developed by Kvaerner Warnow have an overall length of 208.3 m and are 29.8 m wide. With a deadweight of 33,600 tons, they have a total stowage capacity of 2,524 TEU and include 400 reefer sockets.