Marine firms ride waves of demand from Big Oil, military
Considerable handwringing followed the 2010 announcement by Northrop Grumman Corp. that it would close Avondale Shipyard as it spun off its shipbuilding business. Since then Avondale has remained a source of local concern over whether its owners can find other uses for the property to help retain jobs.
Receiving less attention during this time was the growth at offshore vessel supply companies and smaller shipbuilders in the area. But in recent months, several of these companies have made their way into business headlines.
Heavyweight oil service company Tidewater Inc. announced in May that it would spend nearly $400 million to acquire Norwegian vessel company Troms Offshore Supply. The purchase will add six large, technologically advanced deepwater supply boats to Tidewater’s fleet of more than 300 vessels. The company has been gradually upgrading its aging fleet, with modern vessels as large as 300 feet that are specially equipped to serve the deepwater oil drilling industry, particularly in the Gulf of Mexico. The Troms Offshore acquisition now gives Tidewater access to the challenging North Sea drilling region as well.
Meanwhile, Harvey Gulf International Marine LLC announced plans to spend $540 million to enlarge its fleet of supply, specialty and towing vessels, which also serve the deepwater drilling industry. The company has ordered three specialty vessels and will buy 11 more from Gulf Offshore Logistics of Lafayette.
What is driving the action in both these cases is the oil industry’s taste for drilling in waters as much as 10,000 feet deep. Drilling in fields that lie up to 150 miles from shore requires highly specialized equipment, including supply vessels that can maneuver close to drilling platforms in rough water and hold their position for extended periods. As technology has evolved to enable such work, transportation companies have been converting from traditional supply vessels to the new designs.
One of the companies that has led the way is Hornbeck Offshore Services LLC of Covington. With a fleet that includes 50 cutting-edge offshore supply vessels, Hornbeck has undertaken a $1.2 billion building program that will expand its high-tech vessel total to 70 by 2015.
The program clearly has upped the ante for Hornbeck’s competition in the deepwater supply arena.
Louisiana-based shipyards are beneficiaries of these fleet-expansion programs. LEEVAC Shipyards LLC in Jennings, for instance, is building many high-tech vessels for both Hornbeck Offshore and Tidewater and now employs more than 600 people in southwestern Louisiana.
Edison Chouest Offshore LLC is another powerhouse in both marine transportation and construction. A supplier of a range of multi-purpose and specialty vessels to the offshore oil industry, the Cut Off company not only operates a fleet of more than 200 vessels, but also operates five shipyards, including North American Shipbuilding in Larose and LaShip in Houma. Known for designing and producing a host of craft that have raised the bar in marine transportation, the company’s Louisiana shipyards collaborated in delivering last year a first-of-its-kind, 360-foot icebreaker for use by Royal Dutch Shell in Alaska.
While Big Oil has driven much of the growth in marine transportation and construction, military demand generates considerable business as well.
Textron Marine & Land Systems, an operating unit of giant defense contractor Textron Inc., last year won a big contract from the U.S. Navy to build advanced “ship-to-shore connectors” designed to provide easy landing access for the Navy and Marine Corps at most of the world’s shorelines.
The new air-cushioned craft “will provide the surface assault portion of the U.S. Joint Expeditionary Maneuver Warfare tactical plan with the capability to project and sustain military operations from the sea, independent of tides, water depth, underwater obstacles or beach gradient,” Textron said in announcing the program.
Textron Marine & Land Systems CEO Fred Strader says the company’s 600,000-square-foot New Orleans shipyard is designed to build as many as 10 SSC-type craft per year. “Our team was formed from the very beginning to deliver to the U.S. Navy the lowest risk SSC – a highly capable, high performing vessel,” Strader said in a release.
The company has begun designing a test-and-training craft that eventually will lead to construction of a fleet of vessels worth billions of dollars.
The U.S. Coast Guard also has been an important source of business for local area builders. Bollinger Shipyards Inc., in Lockport, recently completed its sixth Fast Response Cutter for the Coast Guard. The 150-foot patrol boat, which can travel at speeds up to 28 knots, has been described by Coast Guard officials as an operational game changer.
Bollinger, which owns 10 shipyards located from New Orleans to Houston, is well known for producing fast military patrol boats, ocean-going double-hull barges, offshore oil field support vessels, tug boats and a range of special-purpose vessels.
As smaller yards hustle to whittle down their backlog of contracts, efforts continue at the Avondale shipyard to replace its former bread-and-butter business of big Navy ships with other kinds of work.
To that end, the facility’s owner, Huntington Ingalls Industries, recently hired Rene Mathieu, a former executive of a French oil services company. Mathieu’s job is to find joint venture partners who can help enable conversion of the Avondale shipyard for use in the production and fabrication of energy infrastructure. In coming months he will split his time between New Orleans and Houston as he works to develop new business that could help employ as many as 3,000 workers.
Luxury Boat Builder Expands
Recent news from yet another shipbuilder could give New Orleans a bigger name in the business of luxury “boats.” Trinity Yachts, founded by New Orleanian John Dane III, has operated in both New Orleans and Gulfport, Miss., since the company’s local yard was damaged in Hurricane Katrina. In May, Dane announced that the company and its affiliated commercial vessel builder TY Offshore had formed a new shipyard group, with investment partner Littlejohn & Co. of Greenwich, CT.
The new company, Gulf Coast Shipyard Group, will own and continue to operate the two shipyards, building commercial, military and luxury yachts. The company plans to invest $9 million in upgrading facilities, and Dane has said that beginning next year, all yacht-building will occur at the France Road yard in New Orleans, where employment could rise from the current 120 to 200 jobs.
Gulf Coast Shipyard Group will also operate a yacht brokerage unit called International Yacht Collection. Trinity has become well known for producing ultra-luxurious yachts and “super-yachts” of 200 feet or more for clients around the world.