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ST Engineering lands $2.6 billion US Navy contract

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The single-largest contract bagged by the group comes from the US Navy

A Singapore-owned shipyard has been awarded a contract worth up to US$1.9 billion (S$2.6 billion) by the US Navy to build ships that can cut through ice in the Arctic and Antarctic.

The work will be done by VT Halter Marine, which is fully owned by Singapore Technologies Engineering (ST Engineering) and based in Pascagoula, Mississippi.

It is the single-largest contract ever bagged by the group, an ST Engineering spokesman told The Straits Times yesterday.

The Polar Security Cutter (formerly known as Heavy Polar Ice Breaker) contract is for the design and construction of at least one and up to three ships, the Singapore company said yesterday.

The first ship delivery, valued at about US$745.9 million, is scheduled for 2024.

If the options are exercised for a second and third vessel, these are expected to be delivered in 2025 and 2027 respectively.

Each vessel is more than 140m long, with a beam (the width at the widest point) of 27m and will be diesel-electric powered.

VT Halter Marine is a subsidiary of US-based VT Systems, a company set up by ST Engineering in 2001.

A significant portion of US polar icebreaker operations is to support research by the US National Science Foundation in both polar regions, says the American government.

The research in the Antarctic focuses on performing an annual mission, called Operation Deep Freeze, to break through Antarctic sea ice to reach and resupply McMurdo Station, a large US Antarctic research station.

In an article carried in The Straits Times Opinion page a week ago, Mr James Stavridis, a retired US Navy admiral, former supreme allied commander of Nato and dean emeritus of The Fletcher School of Law and Diplomacy at Tufts University in the US, noted that the US is one of several countries that has icebreakers.

The US has three active Coast Guard icebreakers, Mr Stavridis added. "Icebreakers are key to two crucial elements of what makes the Arctic so strategically vital," he said.

The first is the enormous trove of hydrocarbons - an estimated two trillion cubic feet of natural gas and nearly 100 billion barrels of oil - that will be uncovered as the ice melts.

Additionally, the melting Arctic ice will create shipping routes that could be geopolitically central for China's Belt and Road Initiative (BRI).

The BRI aims to revive ancient overland and sea trade routes, and connect China to Europe, Africa and other parts of Asia by building a network of ports, roads, railways and industrial hubs.