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1976, Lachmar entered into a contract with an affiliate of Morgas
to oversee the construction and then to maintain and operate the
LNG tankers.
Bonds, guaranteed by the U.S. Government, were issued by
Lachmar to finance the construction of the tankers, and the
Federal Government also subsidized the construction of the
tankers. A portion of the subsidy was eventually repaid to the
Federal Government because one of the tankers was used for
domestic transportation. The tankers were delivered and
transferred to Lachmar on May 15 and September 25, 1980. Morgas’
affiliate was prepared to begin transportation of LNG at the time
of the tankers’ delivery.
To satisfy its obligations under the LNG contract, the
Algerian national LNG company was to construct a terminal
facility for the tankers. For technical, financial, and
political reasons, the facility was not completed until the fall
of 1982, and the Algerian company could not deliver sufficient
quantities of LNG to fulfill its obligations to Trunkline.
Accordingly, the initial uses of the LNG tankers outside the
United States were on September 3 and November 16, 1982,
respectively. Prior to that time, Lachmar bore the expense of
storing the tankers at various locations.
During 1980 through 1982, there was overcapacity in the
world market for LNG tankers, and Lachmar was able to find only
limited use for the tankers prior to their use under the
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Last modified: May 25, 2011