(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.
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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.
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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.