In an era of declining defense budgets, General Dynamics (NYSE:GD) is continuing to steer its ship away from military customers, setting course for civilian markets.
Over the past 14 months, General Dynamics -- one of the nation's premier builders of warships for the U.S. Navy -- has announced contracts awarded to its NASSCO subsidiary to build no fewer than seven separate 610-foot-long, 50,000-deadweight-ton, LNG-conversion-ready fuel tankers for civilian customers.
Seabulk Tankers, a subsidiary of SEACOR Holdings, has ordered three such tankers from NASSCO, and taken out an option to build a fourth. On Monday, General Dynamics announced the award of yet another tanker contract, this one coming from American Petroleum Tankers (APT), a wholly owned subsidiary of Kinder Morgan Energy Partners, L.P., and a buyer of four of the company's tankers already.
The new ship, which General Dynamics said will be the same size as the previous vessels, is one of NASSCO's ECO MR design vessels. It will be capable of carrying up to 330,000 barrels of liquefied natural gas in its hold. Construction of the newest ship is scheduled to begin in Q4 2015, with delivery scheduled for Q2 2017.
In its press release, General Dynamics noted that the latest order, plus NASSCO's existing backlog of tankers and containerships, is a "clear indication that NASSCO is the shipyard of choice for" building these sorts of tankers.