Update: This story is updated with clarification about where work on the former HMS Quorn will take place, and comment from the British government.

LONDON — Shipbuilder Harland & Wolff has inked a deal with the British government to give an ex-Royal Navy mine countermeasures vessel a new lease of life — with the Lithuanian Navy.

The £55 million (U.S. $65 million) deal will see the company reenter the defense sector for the first time in decades. However, the shipbuilder is not carrying out the work at its Belfast yard, famous for building the ill-fated Titanic cruise liner. Instead, it will perform the work at its Appledore yard in southwest England.

Harland & Wolff purchased the Appledore location in 2020, which Babcock International had closed after completing an order for offshore patrol vessels for the Irish Naval Service. The company has also acquired two maritime fabrication sites in Scotland.

The regeneration of the mine-hunting ship, which went by HMS Quorn while in service with Britain, will see the installation of new engines, sonar, weapons and other systems as part of the fixed-price contract expected to conclude 18-24 months after the ship enters the yard in August. That upcoming labor is the first significant work to go into the Devon-based yard since the acquisition two years ago.

The deal could also provide Harland & Wolff with a significant credibility boost as the company and it’s Spanish partner Navantia prepare to submit a bid to the British Defence Ministry to build three large logistics ships, known as fleet solid support ships, primarily to support the Royal Navy’s two new aircraft carriers.

Harland & Wolff Appledore, as the yard is officially known, is partnering with BAE Systems to regenerate the Hunt-class mine countermeasures vessel, originally sold to Lithuania in 2020 for £1 million. BAE signed up to oversee the delivery and integration of some of the more complex engineering tasks.

British Defence Procurement Minister Jeremy Quin said the deal is important for the local economy and will boost NATO capabilities in Europe.

“I’m pleased that this multimillion-pound contract will see a former Royal Navy mine-hunting vessel restored and regenerated in a British shipyard, supporting U.K. jobs and strengthening shipbuilding in the southwest,” he said. “Lithuania is a key NATO ally and Joint Expeditionary Force partner, and this mine-hunting vessel will bolster NATO maritime capability across Europe, ensuring the alliance remains ready to respond to evolving global threats.”

The revitalized ship will see the Baltic state increase its mine-hunting capabilities to three vessels, having earlier acquired and operated two ships similar to the HMS Quorn for several years.

Harland & Wolff, until recently known as Infrastrata, purchased a fourth mine-hunting vessel earlier this year; the former HMS Atherstone will provide common spare parts and components for the Lithuanian ship.

A bigger prize

Harland & Wolff was in administration with 79 employees on its books before Infrastrata acquired the yard in late 2019 to initially provide fabrication capability for a gas storage project it was building near Belfast.

Harland & Wolff’s financial broker, Cenkos, pointed out the latest deal could help improve the shipyard’s reputation. “This is a significant breakthrough for the company, being its first contract in the defence sector, and gives H&W a strong platform to build upon as it pursues additional pipeline opportunities‚ including the Fleet Solid Support program,” Cenkos said in a statement.

But the big prize for the company — and other shipyards in the U.K. — is the logistics ships program for the Royal Fleet Auxiliary, the civilian operator of a fleet of ships that support the Royal Navy.

The ships will replace the aging Fort class with modern vessels able to supply ammunition, dry stores and spares to aircraft carrier strike groups and other maritime task groups.

After years of delay, the £1.6 billion program to build the three 35,000-ton vessels is about to get serious, with four consortia scheduled to submit their bids for the program by the end of this month. The winning bidder will be awarded a contract by the end of March 2023, with the first ship due in service by 2028. All the vessels are scheduled to be delivered by 2032.

In a September announcement, the Defence Ministry named the four consortia vying for the deal:

  • Team UK, which includes BAE and Babcock.
  • Team Resolute, comprising Harland & Wolff, Navantia and British naval design house BMT.
  • A team involving Indian shipbuilder Larsen & Toubro and Leidos Innovations, a U.K.-based business of the American defense company Leidos.
  • Serco, the British support services provider, which has partnered with Dutch shipbuilder Damen.

The outcome is set to be highly controversial if the winning bidder fails to meet political and workforce expectations — that the bulk of the ships are built in the U.K. to protect jobs and skills.

Defence Secretary Ben Wallace told a parliamentary Defence Committee last week that the bulk of the contract would be supplied by British companies, but added he will consider a foreign bid if that company were to offer investment in the U.K. shipbuilding industry as part of its package

“Fundamentally, the majority of that ship project, whether it is build, integration or supply chain, will be U.K. How much — 100%, 60% or 70%? We will see what the bidders are putting in, but it is important, as I have said before, that we are trying to access export markets and productivity investment into yards,” he said during the hearing.

“For example, if a British bid said, ‘I would like your contract, but I am not going to invest in the capital of the yard,’ and a foreign bid said, ‘We will invest in some of your British yards, but some of the build will be in our country,’ which would you accept? The one that does not want to put any investment in machinery and capital, or the one that does want to improve the yard at the same time?”