Huntington Ingalls Industries [HII] announced April 20 that it has decided against forming a joint venture with energy infrastructure company Kinder Morgan Inc. [KMI] to redevelop HII’s Avondale naval shipyard in Louisiana.
HII and Kinder Morgan had explored the possibility of converting the Mississippi River site to a marine terminal to store, load, offload and transport such items as petroleum, coal, ores, metals and grains. But HII said it ultimately concluded that such a project would be too risky, and Kinder Morgan said it determined that demand for such a facility would be insufficient.
The decision means the shipyard’s future remains uncertain. HII said it will continue to assess options for Avondale, including selling the 268-acre property. It said it is working with the state government, including the economic development department.
HII no longer builds ships at Avondale, company spokeswoman Beci Brenton said. As of Jan. 1, the site hosted about 200 employees, most of whom are engineers supporting ship construction at HII’s Ingalls Shipbuilding in Pascagoula, Miss., and other sites along the Gulf of Mexico. In addition, a crew at Avondale continues to maintain the shipyard “for potential redeployment,” Brenton said.
In 2010, Northrop Grumman [NOC], which owned Avondale at the time, decided to close the shipyard, citing reduced workload and excess capacity. HII, which was formed when Northrop Grumman divested its shipbuilding business in 2011, decided to take another look at Avondale’s future after oil and gas industry representatives indicated they might be able to use the site.