Likely breathing new life into its Avondale shipyard, which the company currently plans to shut down later this year following delivery of a ship to the Navy, Huntington Ingalls Industries [HII] yesterday said it is opening an office in Houston, Texas, to develop business that could lead to production at Avondale of infrastructure for the oil and gas industry.
HII is currently building the amphibious transport dock ship the LPD-25 at Avondale, La., along with portions of units for LPD-27. The company has been exploring other opportunities for the facilities with the pending completion of Navy shipbuilding there and it now appears the shipyard will be able to remain open by doing work in a new industry.
“We are in active discussions with respected companies in the oil and gas infrastructure market,” Chris Kastner, HII’s corporate vice president and general manager, Corporate Development, said in a statement. “We’ve satisfied ourselves that the engineering and construction elements of these projects are very comparable to shipbuilding, and we are working very hard, both internally and with prospective customers, evaluating and competing for new opportunities.”
Kastner told Defense Daily that HII is “confident” it will be generating business in the oil and gas industry to create work for Avondale, possibly as early as later this year. He said the skillsets of the engineers and craft people at Avondale are directly transferable to the kind of work it takes to construct and assemble large modules for the energy sector. He also said that entering this adjacent market would require minimal investment for HII.
“We see significant growth” in the Gulf Coast region for oil and gas infrastructure over the next two to five years, Kastner said.
HII Chief Mike Petters last month said that his company was exploring the possibility of using Avondale to support oil and gas infrastructure-related manufacturing (Defense Daily, Jan. 14).
The shipyard sits on 268 acres and offers a competitive advantage given that it has the largest floating dry dock in North America, which sits on the Mississippi River, enabling loading and shipping of infrastructure modules via barge to points along the Gulf Coast, Kastner said.
As builder of modules for the oil and gas industry, Avondale could serve the major oil companies as well as engineering, procurement and construction firms, Kastner said.
HII currently has about 2,000 employees at Avondale and that number will begin drawing down shortly as work related to LPD-25 and LPD-27 winds down. Kastner said that HII eventually hopes to be able to at least sustain that level of workers once Avondale begins bringing in energy-related business.
The shipyard has the potential to employ up to 10,000 workers.