MarAd Announces Commitment for U.S.-Flag Vessels

Tuesday, July 31, 2007
The U.S. Department of Transportation Maritime Administration announced an agreement that could lead to the first LNG ships registered in the United States in almost ten years, potentially creating almost 200 jobs for U.S. mariners. Officials from Woodside Natural Gas, Inc., of Santa Monica, Calif., committed to Maritime Administrator Sean T. Connaughton and representatives from seafaring trade unions that Woodside will create a U.S. presence in the rapidly growing international liquefied natural gas (LNG) fleet. The company agreed to the employment of U.S. mariners in Woodside’s operation of the proposed OceanWay deepwater port located 28 miles off the coast of Los Angeles, and to register its two new LNG regasification vessels under the U.S. flag.

Although the global LNG fleet has been growing rapidly—from 194 ships at the beginning of 2006 to an estimated 373 at the end of 2007—there are currently no LNG ships of American registry. Woodside’s proposed OceanWay facility will use trading LNG carriers to transfer LNG to the U.S.-flagged regasification vessels, which will then convert the liquefied natural gas into natural gas for injection into Southern California’s existing onshore pipeline system. More than 90 American officers and crew will be employed on each of the vessels. OceanWay Secure Energy (Woodside Natural Gas, Inc.) filed an application with the Maritime Administration for a license under the Deepwater Port Act, to build, own, and operate an LNG facility. The Maritime Administration, the U.S. Coast Guard, and the City of Los Angeles are reviewing the revised application for completeness. The company's application to build the OceanWay terminal must be approved by the Maritime Administration, the U.S. Coast Guard, the City of Los Angeles, and the Governor of California. If approved, the specifics of this agreement will become conditions of the deepwater port license.

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