Philly Shipyard, Inc., the sole operating subsidiary of Philly Shipyard ASA (OSE: PHLY) Tuesday (Jan19) announced the authorization by the U.S. Department of Transportation’s Maritime Administration (MARAD) and subsequent order from TOTE Services, LLC (TOTE Services) for the construction of two additional National Security Multi-Mission Vessels (NSMVs). These vessels will replace aging training vessels at Maine Maritime Academy and Texas A&M Maritime Academy. Construction of the two new vessels (NSMVs 3 and 4) is expected to commence in 2022 with planned deliveries in 2024.

Philly Shipyard Awarded Two Additional National Security Multi-Mission Vessels

The order was placed under the April 2020 contract with TOTE Services, which allows for the construction of up to five NSMVs. As announced by Philly Shipyard on April 8, 2020, the initial award included the first two vessels in the NSMV program (NSMVs 1 and 2).

Today’s award for NSMVs 3 and 4 is valued at approximately USD 600 million. If all five ships are ordered and built in series, then the total contract value of the five-ship program would be approximately USD 1.5 billion.

“We are very excited to receive the order for the third and fourth NSMVs from TOTE Services, continuing MARAD’s investment in maritime education and supporting manufacturing jobs in the Philadelphia region’s industrial base,” said Steinar Nerbovik, Philly Shipyard’s President and CEO. “The NSMV program is a critical step forward in our transformation to serve both commercial and government markets. Together with our union partners, workforce and supplier network, this program signals that shipbuilding is here to stay in Philadelphia.”

“On behalf of the entire Board, we are pleased with the confirmation of the next two NSMV vessels,” said Kristian Røkke, Chairman of the Board of Directors of Philly Shipyard ASA. “The shipyard has much to be proud of – a 20-year history of quality ship deliveries to reputable owners, as well as the overall development of a highly skilled organization that is systematically moving the shipyard into a diverse future. Securing these options brings us further confidence in the shipyard’s strategic plan to advance and diversify its offerings.”

The vessels will be owned by MARAD, which developed the initial concept for the design. Construction of the vessels will not require any third-party financing. TOTE Services retains the option for a fifth vessel (NSMV 5).

The engineering, procurement and planning activities on NSMVs 1 and 2 are progressing in accordance with plan. The cutting of steel for the first NSMV on December 15, 2020 marked the first construction milestone in the project.

The contract for the NSMV program has allowed Philly Shipyard to reconstitute its workforce for commencement of the new production work. The hiring process will remain ongoing throughout 2021. The total workforce at Philly Shipyard at full capacity is approximately 1,200.

Source: Philly Shipyard