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Eletson Signs letter Of Intent To Build Tankers At Newport News

Newport News Shipbuilding (NNS) and Eletson Corporation announced that they have signed a letter of intent on four 46,000-ton double hulled product tankers designed by Newport News and designated Double Eagle.

The order, which carries major significance for the U.S. commercial shipbuilding industry far beyond four ships, is the first time since 1957 that an international ship owner will purchase commercial ships from a U.S. shipyard.

The Double Eagle design is the first to be found acceptable by the U.S. Maritime Administration for Title XI financing guarantees. The letter of intent calls for the building of two tankers with an option for two more. Eletson corp. is a leading product tanker operator, headquartered in Piraeus, Greece. The ships will be owned by Eletson affiliates and managed by Eletson Corp.

Completion of the contract between the two companies is subject to the approval of financing guarantees from the U.S. Maritime Administration (MarAd) under a new provision of Title XI, recently passed by Congress, to assist the transition of U.S. shipyards into the commercial shipbuilding business.

MarAd informed NNS in a letter dated May 17, 1994 that the Double Eagle design was acceptable for Title XI financing for both domestic and export sales. MarAd's Title XI program will be available after its review of Eletson's application. U.S. Maritime Administrator A.J.

Herberger said, in his letter of acceptance of the Double Eagle design, that "MarAd looks forward to working with Newport News on this exciting project." The Double Eagle design incorporates all of the latest international and domestic regulations and has been engineered for series production. Gregory Hadjieleftheriadis, vice president of Eletson, said, "We are very pleased to be contracting for these ships with Newport News Shipbuilding. We have worked extensively with Newport News to incorporate special Eletson features, which are normally found in the company's international fleet of ships. Newport News has a reputation as a world class builder of Navy ships. We look forward to working with them on these Double Eagle commercial tankers." Greg Cridlin, vice president, commercial, Newport News Shipbuilding, said, "We are particularly pleased to have signed this letter of intent with such a fine company as Eletson. We very much look forward to building their ships. We believe the Double Eagle design will lead many other international operators to Newport News. Newport News intends to be a competitor in the international commercial ship market." Edward A. Waryas, director, commercial marketing at Newport News, who has been leading the team to introduce the Double Eagle to the international market, said, "We are honored to be selected to work with Eletson, one of the finest ship operators in the world. Based on the overwhelming response we have received since the Double Eagle design was introduced to the world market in March, we are confident that many other international ship owners will follow Eletson's lead." Initial details of the Double Eagle design were reported in the April, 1994 edition of Maritime Reporter & Engineering News. The vessel, as originally designed and presented by NNS, measures 649 ft. (197.8 m) long and 102 ft. (31 m) wide, with a deadweight design draft of 41,675 M.T. Newport News Shipbuilding is a division of Tenneco, Inc., a Houston-based diversified industrial company with major business interests in natural gas transportation and marketing, farm and construction equipment, automotive parts, ship design, ship construction, ship repair, packaging and chemicals.

According to a recent IAAA Associates, Inc. (Washington, D.C.) report, NNS has tapped a market which looks positive for near- to mid-term growth. IMA forecasts orders for 667 to 845 new product tankers between now and the end of 1998. IMA said that while U.S. shipbuilders will need to compete with foreign yards, its analysis indicates that 400 to 510 of the projected orders will be available on the open world market. (For information on obtaining IMA's report, call Jim McCaul at (202) 333-8501.)




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