Industry Vital Signs Looking Good

in 1996 to infuse the U.S. shipbuilding industry — particularly for the Gulf Coast portion — with vitality such as it had not experienced for two decades. Included among significant devlopments: • Growing inland waterways traffic finally overcame the residue of 1970 barge over-building, creating a bonanza of orders for hopper barges • Environmental regulations created a mini-boom in double-hulled product tanker and barge construction. • A full-fledged boom in offshore activity in the Gulf of Mexico led to orders for the biggest, most powerful offshore service vessels (OSVs) ever to ply the marine oil patch, and triggered a basic retooling of the traditional OSV by one shipbuilder. • A resurgent MarAd fueled the shipbuilding frenzy with more than $2 billion in loan guarantees over the last several years.

• An alliance headed by Avondale contracted to design, build and service the first of 12 ships in the U.S.

Navy's next generation of amphibious warships.

Signs of the times included: initiation of public trading in the shares of the country's largest private shipbuilder, Newport News Shipbuilding; plans to reopen a decade-dormant East Coast shipyard with MarAd-backed, state-ofthe- art technology; and a pervasive worker shortage confronting Gulf Coast shipbuilders.

Gulf Coast The most impressive regional showing among the nation's shipbuilders was on the Gulf Coast.

Three-fourths of the $2 billion in new vessel construction covered by pending applications for MarAd Title XI loan guarantees is earmarked for Gulf Coast yards. The region fared even better in the last fiscal year's Title Xl-approved work list, garnering 80 percent of $1.4 billion. But Mar Ad's list does not tell the whole story. For example, 17 deepwater OSVs ordered by Galiano, La., operator Edison Chouest could represent $200 to $300 million, though neither Chouest or its shipbuilding subsidiary will confirm the cost. Work on the vessels has been parceled out among half a dozen yards where the hulls will be built and shipped back to Chouest for completion and outfitting.

Record high demand for offshore drilling rigs sparked the reopening of the LeTourneau yard in Vicksburg, Miss., by new owner Rowan Companies. Rowan commissioned the building of first one, then two more large, North Seatype jackups at a total cost of $550 million.

Further south, Gulf Island Fabrication at Houma, La. — made up of two fabrication yards which shut down following the mid-1980s oil price bust — added a third yard. The yard filled up with work such as Texaco's deepwater compliant tower platform Petronius, and Shell offshore production platform Enchilada.

At a water depth of 650 ft. (198 m), and a cost of $240 million, Enchilada is not technically a deepwater project, but nonetheless still the offspring of the 3-D seismic technology which unlocked the 1,000+ ft. reaches of the Gulf of Mexico, and drove the revival which has revitalized the domestic offshore industry.

Halter Marine Group of Gulfport, Miss. — spun off from Trinity Industries in an IPO late last year operates 10 Gulf Coast shipyards. The company added more than 1,000 workers last year to deal with a varied backlog of approximately $400 million in projects which included hopper, deck, crane and tank barges, and tractor and integrated ocean tugs.

And, despite such impressivenumbers, the real push to begin rebuilding the 1,400-vessel OSV fleet has scarcely begun.

Tidewater Inc. has ordered an $8- million R&D offshore workboat from Halter which it will operate for at least one year before considering a wholesale fleet rebuilding program, according to CEO William C. O'Malley.

Service Marine Industries (SMI) hopes to accelerate that process industry-wide with the introduction of its line of THOR class OSVs. (See story, previous page.) Marketing Manager Peter Husta estimated the vessel cost would be approximately 10 percent higher than for comparable, conventional OSVs.

There will be at least one new shipyard in the running for offshore work, as Bluntstown Shipyard expects to be running within six months. The 40-acre yard on the Apalachicola River, formerly owned by Rysko Shipbuilding, has been shut down for a decade.

The Gulf's two major shipyardsAvondale and Ingalls Shipbuilding — have differing agendas. Ingalls Communications Director James Mclngvale said his company "is and will continue to be a naval shipbuilder. The company will enter other markets only in circumstances that fit with our military shipbuilding schedules." The yard's current schedule includes three LHD amphibious assault ships and six Aegis class destroyers among a backlog of $3.1 billion. Avondale is committed to cutting its dependence on military work in half. In October, the yard christened its first double-hulled tanker for AHL. The product carrier is one of four Avondale is building under a $143.8-million contract. (See story, page 36, December 1996 edition.) In November, Avondale was awarded its fifth vessel of the Navy's Strategic Sealift construction program, at a price of $240 million.

In late December, the yard, along with Bath Iron Works, Hughes Aircraft and Intergraph Corp., captured the contract for the Navy's first LPD-17 ship, with an option for two more. (See story, page 74.) The labor shortage on the Gulf Coast has become epidemic.

There was a great exodus of skilled shipbuilders from southern Louisiana and adjacent states fol-