Two Orders For Six LNG Ships At GD-Quincy Yard Will Exceed $1 Billion

Within a recent one-week period, General Dynamics Corporation accepted two conditional orders f o r six liquefied natural gas (LNG) carriers at a total cost of more than $1 billion. Three of the ships were ordered by Zapata Western LNG Inc., a subsidiary of Zapata Corporation of Houston. The other contract was signed with Ogden Marine Indonesia Inc., a subsidiary of Ogden Corporation of New York.

The six 125,000-cubic-meter ships will be part of a fleet that will transport LNG f r om Indonesia to the U.S. West Coast under an import agreement between Pertamina, the Indonesian national oil company, and Pacific Indonesia LNG Company, a U.S. joint venture company owned equally by Pacific Gas and Electric Company and Pacific Lighting Corporation.

Both contracts are conditional, contingent upcn approval by the Maritime Administration of construction d i f f e r e n t i a l s u b s i dy (CDS), and Title XI guarantees to aid in financing the construction of the six vessels. Three of the ships will be owned and operated by Ogden Marine Indonesia and a new subsidiary of General Dynamics. Zapata Corporation said that its construction contract with General Dynamics depends on the negotiation of a definitive partnership agreement between the two companies. The Houston company stated that the terms of the agreement will not require Zapata's participation in the financing of the vessels, although the company's board of directors could elect at a future date to participate in the vessel financing. Regardless of Zapata's possible financial participation, one o f its subsidiaries would operate the vessels, and would be entitled to a share of the operating profits.

Construction of the six LNG vessels also depends on other conditions, including construction of an LNG receiving terminal in California, and various Federal and State of California regulatory approvals.

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