LeTourneau rig on track; sister firm lands $85M job

Published 12:01 am Sunday, February 6, 2011

Work on LeTourneau Technologies’ current jackup rig, its lone major construction job, is on pace for a September delivery to sea. Meanwhile, its sister yard in Texas has announced a major mining order.

The $150 million Joe Douglas is third in a line of the 240-C class of jackups built in Vicksburg. Rigs in the class can drill in as many as 400 feet of water on its 491 feet of support legs and reach 80 feet of cantilever. Houston-based Rowan Companies Inc. has said it has no orders lined up for LeTourneau, which builds mining equipment at a yard in Longview, Texas, in addition to the shallow-water drilling rigs built at its riverside plant off U.S. 61 South.

The local work force of about 600 has been doing service work on existing rigs and on contracts for rigs built overseas.

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“We’re making kit components and building other offshore products,” said Bo-D Massey, general manager of the Vicksburg yard.

Rowan announced on Tuesday that an order has been received to manufacture at its Texas facility $85 million in front-end wheel loaders for iron ore mining in Brazil. The 15 pieces of equipment — including four L-1350 Generation 1 loaders, eight L-1850 Generation 2 loaders and three L-2350 Generation 2 loaders — were purchased for a single customer and will increase LeTourneau’s mining backlog by about 60 percent, adding to an 87 percent backlog during 2010, the company said. Fuel consumption would be reduced 50 percent due to the hybrid electric traction drive system, the company said.

“This order, one of the largest loader orders we have ever received, shows the strength of the global mining equipment market and our increasingly strong foothold in Brazil,” said LTI president and CEO Thomas Burke in the release. “We believe 2011 will be a record year for our mining products business, and that Brazil will continue to be a strong growth market for us.”

In December, the company announced it had included rig-strengthening components to a deal inked in 2009 to supply rig kits for Brazil-based energy company Petrobras. The $185 million in contracts now call for a redesigned, Super 116E-PB rig class that can drill in 375 feet of water on 477 feet of leg length. Deliveries are set for late 2011 and early 2012.

In 2008, Rowan officials mulled spinning off LeTourneau to another company, only to back off when the recession hit. The topic came up again in 2010 during financial reporting analysis with industry watchers and hasn’t been ruled out.

Economic development funds to keep the yard operating in case work slows down has been broached with the Mississippi Development Authority, Warren County Port Commission Executive Director Wayne Mansfield said.