SGGKY Singapore Tech Engineering Ltd (PK)

By Maria Armental 

A shipbuilding unit of Singapore Technologies Engineering Ltd. has been awarded a roughly $746 million contract to build the first heavy icebreaker in more than 40 years for the U.S. Coast Guard.

The Defense Department contract award to Mississippi's VT Halter Marine Inc., which could reach nearly $2 billion if all options are exercised, comes a day after the Coast Guard updated its Arctic strategic outlook.

"The Arctic's role in geostrategic competition is growing, in large part, because it is no longer 'self-secured' by permanent sea ice," the Coast Guard said in the outlook.

"Against the backdrop of great power competition, the polar security cutter is key to our nation's presence in the polar regions," Adm. Karl Schultz, the Coast Guard's commandant, said in a statement.

Adm. Schultz said a new fleet of cutters are needed to "meet the unique mission demands that have emerged from increased commerce, tourism, research, and international activities in the Arctic and Antarctic."

The U.S. Navy, whose fleet isn't designed to operate in icy waters, has said it plans to expand its role in the Arctic by returning resources to a closed Naval base in Alaska's Aleutian Islands and that Navy vessels would undertake freedom of navigation operations in the Arctic.

The Coast Guard operates the only U.S. icebreaker in the region, a cause of concern among some lawmakers and defense officials because Russia operates dozens of icebreakers and China is building a fleet of such vessels.

The Coast Guard ultimately aims to have as many as six icebreakers -- three heavy and three medium -- to patrol the Arctic.

VT Halter Marine beat out two rivals, which analysts have said were Huntington Ingalls Industries Inc. and General Dynamics Corp. Neither company responded to requests for comment.

In its outlook, the Coast Guard said Russia has built 14 icebreakers and six Arctic bases since 2013 and that China has conducted six Arctic expeditions.

Currently, the Coast Guard's polar fleet includes a 399-foot heavy icebreaker that was commissioned in 1976 and a 420-foot medium icebreaker that was commissioned in 2000.

The heavy icebreaker, Coast Guard Cutter Polar Star, underwent a three-year reactivation and returned to operations in late 2013, according to the Coast Guard's website.

The new icebreaker is expected to be completed by June 2024.

"The Coast Guard's heavy polar icebreakers are a critical part of our nation's ability protect our interests in the polar regions," Sen. Roger Wicker (R., Miss.) said in a statement. Mr. Wicker is a senior member of the Senate Armed Services Committee and chairman of the Senate Committee on Commerce, Science, and Transportation.

--Doug Cameron and Ben Kesling contributed to this article.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

April 23, 2019 21:21 ET (01:21 GMT)

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