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General Dynamics (GD) Unit, TOTE Finalize Contract To Build LNG-Powered Containerships

 December 04, 2012 03:33 PM
 


(By Balaseshan) General Dynamics Corp. (NYSE: GD) said its unit has finalized a contract with TOTE Inc. to build the first liquefied natural gas (LNG)-powered containerships in the world.

General Dynamics NASSCO has finalized a contract with TOTE for the design and construction of two 3,100 TEU LNG-powered containerships, setting a new benchmark in green ship technology.

When completed the 764-foot-long containerships are expected to be the largest ships of any type in the world primarily powered by LNG. The contract between NASSCO and TOTE Shipholdings Inc., a subsidiary of TOTE, includes options for three additional ships.

[Related -Northrop Grumman Corporation: How Defense Budget Will Fare In 2014?]

Construction of the first containership is scheduled to begin in the first quarter of 2014, with delivery to occur by the fourth quarter of 2015; the second ship will be delivered in the first quarter of 2016.

The ships will be designed by DSEC, a subsidiary of Daewoo Shipbuilding & Marine Engineering (DSME), located in Busan, South Korea. The design will be based on proven containership-design standards and will include DSME's patented LNG fuel-gas system and a MAN ME-GI dual fuel slow speed engine.

NASSCO has successfully partnered with DSEC previously for the design and construction of five State-class product tankers which currently operate in the U.S. Jones Act market. All of the containerships will be constructed at the NASSCO shipyard in San Diego.

[Related -Lockheed Martin Corporation (NYSE:LMT): How A Small Budget Deal Impacts Defense Contractors?]

The vessels will operate on either fuel oil or gas derived from LNG, which will significantly decrease emissions while increasing fuel efficiency as compared to conventionally-powered ships.

The LNG-powered containerships will also include a ballast water treatment system, making them the greenest ships of their size in the world. The double-hulled ships will operate between Jacksonville, Florida, and San Juan, Puerto Rico.

GD is trading up 0.65% at $66.12 on Tuesday. The stock has been trading between $61.09 and $74.54 for the past 52 weeks.

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