UPDATE 1-Huntington Ingalls seeks energy-sector orders for Avondale

Tue Feb 5, 2013 1:35pm EST

* Company eyes orders from $10 mln to over $100 mln

* Avondale did commercial work two decades ago

* Will reevaluate plan to close Avondale later this year

WASHINGTON, Feb 5 (Reuters) - Huntington Ingalls Industries Inc said it is actively pursuing infrastructure orders from the oil and natural gas industry for its Avondale, Louisiana, shipyard, which had been slated to close at the end of 2013.

The shipbuilder for the U.S. Navy said on Tuesday it is opening an office in Houston to go after orders, and is already in active discussions with various companies in the oil and gas sector. It plans advertisements in Gulf Coast newspapers on Wednesday.

Chris Kastner, corporate vice president and general manager of corporate development, told Reuters that Huntington Ingalls would reevaluate plans to close the Avondale facility, or lay off more workers, depending on how the new business did this year.

He declined to give a revenue target, saying the company was more focused on validating the business model for the new work.

Northrop Grumman Corp announced plans to close the 268-acre shipyard outside New Orleans in 2010, later deciding to spin off its entire shipbuilding business into Huntington Ingalls.

Mike Petters, chief executive of Huntington Ingalls, said the workforce at Avondale, which numbers around 2,000 now, had unique engineering and manufacturing capabilities that would help the company compete in the energy sector.

Petters had discussed with reporters in January the possibility of changing the focus of the shipyard.

The facility was also ideally located in a region where manufacturing demand is outstripping supply, especially in the energy markets, he said.

"Coupling this talent with our world-class facilities leads us to believe we have everything in place at Avondale to excel in this market," Petters said in a statement announcing the company's thrust into energy infrastructure work.

Kastner told Reuters the company would bid for projects ranging in size from $10 million to the $100-million range.

He said the company was open to a possible partnership for the Avondale facility, but did not view that as necessary to start bidding for smaller orders.

The Avondale shipyard has worked on other commercial projects in the past. About two decades ago, it built equipment for a hydroelectric plant, which is still operating, and a prison barge in use in New York, Kastner said.

"Avondale has a rich history in competing for a very diverse amount of work," he said.

Huntington Ingalls shares were trading nearly unchanged at $44.21 on the New York Stock Exchange on Tuesday.

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