Eastern lands major shipbuilding deal

St. Joe shipyard to complete work on support vessels

If ever the maxim “one man’s loss is another man’s gain” were to be applied to shipbuilding, then it certainly applies to the latest development at Eastern Shipbuilding Group.

After a decade-long court battle between two Louisiana-based shipbuilders was finally settled a few months ago, Eastern has been the fortunate recipient of a contract to complete the work on two enormous state-of-the-art support vessels for the oil and gas industry, a contract that will bring hundreds of jobs, and thousands of dollars, to Gulf County beginning this spring.

“The previous shipyard did all the easy stuff,” said Joey D’Isernia, chairman and CEO of Eastern Shipbuilding Group, Inc. “We get to do the challenging stuff which we’re good at.”

And so Eastern’s Port St. Joe shipyard soon will see delivery of the first of two 365-foot long ultra high-spec 400 class multi-purpose support vessels from Hornbeck Offshore Services, LLC (HOS), which has been embroiled in a legal dispute with the Houma, Louisiana-based Gulf Island Shipyards over the past seven years.

Hornbeck ordered the vessels, the HOS Warhorse and HOS Wild Horse, a decade ago and expected they would be delivered in 2018. 

According to the publication Maritime Executive, Gulf Island had the vessels under construction and launched them in 2016, only to have Hornbeck announce it was terminating the contract, and allege in subsequent legal action that it had identified numerous faults during the construction and were unhappy the ships were at least a year behind schedule. Gulf Island then sued Hornbeck for wrongful termination.

Under the terms of an October 2023 settlement, Gulf Island is paying Zurich American Insurance Company, the issuer of the performance bonds for the support vessels contracts, a total of $20 million. They are also handing over the vessels to Zurich, which just contracted with Eastern to complete the two ships, which remain in dry dock in Louisiana.

The news release said Eastern has rescued several faltering programs in its history by successfully guiding “numerous clients in reviving shipbuilding initiatives that veered off course with previous shipyards.”

“This was a very troubled program, in litigation for a long time,” said D’Isernia. “They wanted to make sure they went with a reliable and trusted shipbuilder. They came to the professionals and the professionals are at Eastern.”

Since 2011, Eastern has built and delivered 12 vessels for Hornbeck, and is at work on a 13th project, a pioneering conversion of the first-of-its-kind service operation vessel the HOS Rocinante, named for Don Quixote’s horse.

The 280-foot Rocinante, constructed by Eastern in 2014, is being converted at the company’s Allanton Shipyard in Panama City, and will eventually be transferred to the Port St. Joe yard to be finished.

As for the War Horse and the Wild Horse, they’ll be at a repair yard in Louisiana for the next two to three months. 

“When the bonding company came to us, it was our strong recommendation that they were dry docked to correct deficiencies below the water line,” said D’Isernia. “We wanted to make sure when the vessels got here that they were in a position that we could work on immediately.

“We should receive the first vessel by the end of April or the first part of May,” he said. “There are always surprises in shipbuilding, but we’re confident that they’ll get over here in a reasonable amount of time.”

Drawing on an in-house team of over 120 engineers, Eastern will do most all the finishing work, on everything from piping to electrical machinery to the outfitting.

“Very little of that is actually done (so far),” D’Isernia said. “We’ll bring them in, survey them and finish them and make sure they receive all the regulatory certificates. It’s a very large scope of work, with a lot of engineering.”

Along with the two support vessels, Eastern will ship in about 80 container boxes of loose materials, to be kept in warehouse space at Allanton.

“All the work is planned to be done in St. Joe,“ D’Isernia said. “Once you get both vessels at peak production, there’ll be over 400 craftspeople at work on the two boats.”

Once they’re completed and delivered, D’Isernia described these support vessels “as kind of like a very large Swiss army knife. It can deliver supplies to drilling rigs, such as fuel and drilling mud that lubricates the drilling heads, and all the supplies.

“It also has two very large cranes on it that can do subsea construction activities,” he said. “Drilling is just the first part, then you have to build a lot of infrastructure to capture that oil and safely deliver it to the surface.”

The Warhorse and the Wild Horse will feature two large cranes which are “heave – compensated,” meaning they are able to adjust their timing in unison with wave action.

“It’s a very neat thing to see,” D’Isernia said. “We don’t actually build them, they’re built overseas, but we have a lot of experience installing them and hooking them up.”

The ships will also be outfitted with two remotely operated vehicles, which assist the cranes with the subsea work. “They’re basically self-propelled little submarines attached to an umbilical that provide eyes for the work,” he said. “They also have little arms on them, they’re robots.”

In the middle of the ship is a spacious moonpool, a roughly 25-foot by 25-foot sealed hole through which items can be lowered to the sea bed in a controlled environment.

The support vehicles also provide accommodations for as many as 102 personnel, making them what is known as a flotel, short for floating hotel. “A lot of times with construction work offshore, there’s not enough room on a rig for those people to stay,” D’Isernia said. “They’ll house all the people, and be connected by a very large walk-to-work gangway.”

While the two support vessels will likely to be busy in the Gulf of Mexico serving the offshore oil industry, they have the capability to be deployed worldwide. And they may be drawn into duties with the offshore wind market.

“It’s pretty much in its infancy but as it’s developed, there will be an increased need to build and sustain a wind farm,” D’Isernia said. “So those same capabilities lend themselves to supporting an ever-growing offshore wind market.”

Last week’s announcement has been well-received by local leaders.

“The Eastern shipyard has been a job creator for Gulf County, and we are excited by the news that work will soon resume at the Port St Joe shipyard,” said Jim McKnight, director of the Gulf County Economic Development Coalition. “It could get a little crowded out there, as I understand that work on a new ferry for Long Island, New York is scheduled to begin in March, thereby placing three ships in the yard by the end of May.

“May is a good month to ramp up operations as our local high school will be graduating a number of students with welding training/certificates,” he said.

“St. Joe will be quite the bustling shipyard,” said D’Isernia. “We haved approximately 1,500 employees, however we will need more. We are actively recruiting locally, regional and nationwide. We’ll bring in engineers to program professionals to craft people to build the ships.”

He said that with as many as 450 workers, not including vendors, reporting each day to the shipyard, there will be a significant economic effect on the local economy.

“Some will live in Port St. Joe and Wewahitchka, and they’ll buy homes and pay taxes,” D’Isernia said. “The economic impact it has will have a wide-ranging impact that will ultimately elevate the quality of life in Gulf County.

D’Isernia said he is pleased with the working relationship Eastern has built with the local schools, which have each served as “talent pipelines to bring in trained welders and shipbuilders and give them an opportunity for a great career.’

“Ultimately Gulf County will produce incredible ships and assets that will change the world,” he said. “We as a company have invested a lot of money in our facility in Port St. Joe and we’ve been welcomed by open arms, and already delivered some great ships.”