THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Friday, January 31, 1997 TAG: 9701310560
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: 60 lines
Mobil Corp. has agreed to buy the first commercial tanker built by Newport News Shipbuilding in more than 15 years.
The Fairfax-based oil giant and the Peninsula shipyard announced the deal Thursday. Terms were not disclosed.
The petroleum product tanker is the first of four double-hulled ships that had been ordered by a Greek shipping firm, Eletson Corp. It had been scheduled for delivery this month, but construction difficulties pushed delivery back to March.
Newport News Shipbuilding disclosed in December that it expects to lose nearly $90 million on the $140 million order. Some losses had been expected as the yard re-learned how to build commercial ships.
The shipyard is trying to preserve its 18,000 jobs by diversifying back into commercial shipbuilding. For more than a decade it has built just Navy aircraft carriers and submarines.
Why Eletson agreed to the sale of the tanker is unclear. Eletson officials could not be reached.
While some industry insiders say there have been contract problems, the shipyard denies it. ``We expect them to take delivery of the last three,'' said shipyard spokeswoman Jerri Fuller Dickseski.
A Mobil spokesman said the company bought the ship because it could. It was an opportunity.
``Mobil came to us looking for a ship to replace one that was being retired later this year,'' William P. Fricks, the shipyard's chairman and chief executive, said in a statement. ``We had one that was nearing completion for another customer and were pleased that we were able to structure an agreement that was good for all three companies.''
The 45,000-ton tanker will replace Mobil's 37-year-old Seminole. Mobil spokesman Chris Springham described the Seminole as sound, but single-hulled.
The Seminole needed to be replaced eventually because the Oil Pollution Act of 1990 requires that all tankers plying U.S. waters have double hulls by 2015. A double hull makes oil spills from collisions and groundings less likely.
Mobil will use the new tanker to deliver petroleum products to South Florida and other U.S. ports from its refineries.
While Mobil operates 33 ocean-going tankers worldwide, the Seminole is the only tanker it uses between U.S. ports. It also uses tugs and barges between domestic ports.
Mobil will take delivery of the tanker in May or June, Dickseski said. Delaying delivery this time are some additional modifications needed to meet Mobil's needs.
Among the alterations, the tanker needs changes to handle different grades of fuel, a different firefighting system and a reduction in the radar mast height so the ship can pass under bridges, Dickseski said.
Newport News Shipbuilding is assessing the delivery schedule for the remaining three Eletson tankers, but no significant changes are expected, Dickseski said.
A subsequent order for five more tankers worth about $200 million also shouldn't be changed significantly, she said. Those tankers also will be used in domestic markets.