Horizon Lines says more about LNG repower plans

horizon spiritJUNE 26, 2013 — Jones Act containership operator Horizon Lines, Inc. (OTCQB: HRZL) has issued a statement on its plans to replace the steam turbine plants in two 33 year old containerships, the Horizon Spirit and Horizon Reliance, with geared medium speed diesel dual (LNG and liquid) fuel engines. The ships were originally built as LASH carriers (see earlier story).

Horizon's repowering plans first came to light when it emerged that it had received a predetermination that the work involved could be done in a foreign shipyard without jeopardizing the ships' Jones Act eligibility,

Today the company said more on where it plans to carry out the conversions

It said that the project, which would include an integrated repowering solution encompassing main engines, supporting components, and LNG storage tanks, has attracted interest from both domestic and foreign shipyards.

"As a result, six request-for-pricings (RFPs) have been issued to U.S. shipyards and six have been issued to foreign shipyards," said today's statement. "The company has not decided where the repowering work would be conducted at this time, pending receipt and evaluation of the RFPs."

"We expect to receive the completed RFPs in mid-July and will evaluate each based on the overall value that the shipyard can provide in terms of quality of work, cost of the project and schedule requirements," said Pete Strohla, Vice President and General Manager of the company's Ocean Transportation Services group. "As we further explore a comprehensive fleet program, additional RFPs will be needed to meet our vessel requirements. We expect U.S. shipyards will provide bids for this initial repowering project, as well as for upcoming projects. We tentatively expect work to commence on the first vessel in January 2015 and the first two ships to be completed late that same year or in early 2016."

Horizon Lines also is conducting due diligence regarding various engine manufacturers capable of meeting the company's specifications for a dual-fuel, medium-speed diesel power plant required for the planned repowering project. The company currently does not have a contract with any engine manufacturer but has engaged MAN Diesel & Turbo SE to conduct preliminary engineering, consulting and design work related to the proposed repowering project.

"Horizon Lines is committed to a comprehensive repowering program that will improve our fleet's fuel efficiency and environmental impact," said Bill Hamlin, Executive Vice President and Chief Operating Officer. "Doing this in a cost-effective manner, while at the same time continuing to provide outstanding service to our customers without disruption, is consistent with Horizon Lines' commitment to its customers, the consumers in the markets we serve, and our obligations as a Jones Act carrier."

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