NEW ORLEANS, LOUISIANA -- Avondale Industries, Inc. (NASDAQ/NMS-AVDL) announced today that it has signed a contract with Maritrans Ocean Transport Inc. (a subsidiary of Maritrans Inc., NYSE symbol TUG) for the construction of six 42,000 DWT Product Carriers. The tankers will engage in transportation of petroleum products between U.S. ports under the Jones Act. The value of the contract is undisclosed at this time. The contract is subject to Maritrans receipt of a Title XI financing guarantee from the U.S. Maritime Administration ( MARAD ) on satisfactory terms. These U.S. flag, double hull vessels will comply with all of the requirements of the Oil Pollution Act of 1990. Delivery of all six vessels is scheduled prior to the end of 1998. At peak manning this project will employ over 1,200 people at the shipyard. The Avondale design is a direct result of a one­year multi-faceted effort supported by the Department of Defense s Advanced Research Projects Agency s (ARPA) Maritech Program in consultation with the Maritime Administration. Mr. Albert L. Bossier, Jr., Avondale s Chief Executive Officer, said Avondale is pleased to be working with Maritrans, a U.S. based company with a 65 year commitment to building and operating vessels for the U.S. domestic trade. This contract demonstrates the commitment by the U.S. shipping industry to provide safe transportation compliant with the Oil Pollution Act of 1990 and Avondale is pleased to be a part of that commitment. This contract is a key event in the accomplishment of our strategic plan to increase commercial activities. Mr. Stephen A. Van Dyck, Chairman and Chief Executive Officer of Maritrans, commented, We are very excited about expanding our marine operations into the tanker trade. This represents a significant financial investment into providing our customers and the American public with safe, economical and reliable petroleum distribution systems. We are pleased to be renewing our relationship with Avondale Industries, as they have been a long-term partner in the construction of our existing tug and barge fleet. This represents the fourth major commercial contract that Avondale has received this year. The Title XI program was instrumental in allowing Avondale to secure this new business by providing financing guarantees for ship owners in addition to providing a guarantee for its current shipyard modernization effort. The Avondale modernization effort involves a $20 million facility upgrade that will provide efficient steel fabrication under cover. The area of the new steel processing factory is approximately 570,000 square feet. Avondale Industries, Inc., headquartered in metro New Orleans, is one of the nation's leading marine fabricators. In addition to its shipbuilding operations, the Company specializes in boat construction and is a major repair contractor for commercial and Navy ships. It is also involved in the modular construction of plants and components for a variety of land-based industries. Maritrans owns and operates a fleet of U.S. flag tugboats and oceangoing petroleum tank barges along the Gulf and Atlantic Coasts and also owns and operates oil storage terminals on the Atlantic Coast. The common stock of the Maritrans Inc. is listed on the New York Stock Exchange under the symbol TUG.