EXHIBIT 10.18

      AMENDMENT NO. 2

                                       TO

                                 LOAN AGREEMENT

      AMENDMENT NO. 2 dated as of May __, 1999 ("Amendment No. 2") to the
Loan Agreement dated as of December 30, 1998 as amended by Amendment No. 1
dated as of January 30, 1999 (as so amended) (the "Loan Agreement"), among
HORIZON VESSELS, INC., a Delaware corporation, HORIZON OFFSHORE CONTRACTORS,
INC., a Delaware corporation (together, the "Borrowers"), HORIZON OFFSHORE,
INC., a Delaware corporation (the "Guarantor"), THE CIT GROUP/EQUIPMENT
FINANCING, INC., a New York corporation ("CIT"), HELLER FINANCIAL LEASING,
INC., a Delaware corporation, U.S. BANCORP LEASING & FINANCIAL, an Oregon
corporation, SAFECO CREDIT COMPANY, INC., a Washington corporation and
TRANSAMERICA EQUIPMENT FINANCIAL SERVICES CORPORATION (collectively, the
"Original Lenders") and CIT as Agent for the Lenders (the "Agent").

      W I T N E S S E T H:
      - - - - - - - - - -

      WHEREAS, pursuant to the Loan Agreement, the Lenders made available to the
Borrowers a loan facility of up to USD 60,000,000 (the "Loan"), as evidenced by
the secured promissory note of the Borrowers dated December 30, 1998 (the
"Note"); and

      WHEREAS, Phoenixcor, Inc., a Delaware corporation (the "New Lender,"
and together with the Original Lenders, the "Lenders") wishes to become a
Lender; and

      WHEREAS, the Borrowers, the Guarantor and the Lenders wish to increase the
Commitment and to amend certain other provisions of the Loan Agreement.

      NOW THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree to amend the Loan Agreement as follows:

1.    The Definitions of the Loan Agreement are hereby amended as follows:

      (a)   Each reference in the Loan Agreement to "Lenders" is hereby amended
            to include the New Lender.

      (b)   The definition of "Commitment" is hereby amended to read as
            follows: "Commitment means USD 73,800,000.00."

      (c)   The definition of "Loan Documents" is hereby amended to read as
            follows:
<PAGE>
            "Loan Documents" means this Agreement, the Mortgages, the Security
            Agreement, the Guaranty, the Note, the Amendment Documents and the
            Second Amendment Documents, as each may be amended, supplemented,
            restated or endorsed from time to time.

      (d)   The definition of "Note" is hereby amended to read as follows:

            "Note" means the Amended and Restated Secured Promissory Note of the
            Borrowers in favor of the Agent, substantially in the form of
            Exhibit A attached to Amendment No. 2 and made a part thereof.

2.    Sections 1.1(c)(d) and (e) of the Loan Agreement are hereby amended to
      read as follows:

      "(c)  The Loan shall be made in four (4) Advances. Subject to the
            limitation contained in Section 1.1(a) above, the Advances shall be
            in the following amounts:

             (i) First Advance -  USD 50,000,000
            (ii) Second Advance - USD  5,000,000
           (iii) Third Advance -  USD 13,800,000
            (iv) Fourth Advance - USD  5,000,000

      (d)   Intentionally omitted.

      (e)   If the Fourth Advance is not made by June 30, 1999, the obligations
            of the Lenders to make such amount available to the Borrowers shall
            terminate."

3.    Section 1.3(a) of the Loan Agreement is hereby amended to read as
      follows:

      "(a)  The Borrowers shall jointly and severally repay the principal amount
            of the first Advance in eighty-four (84) consecutive monthly
            installments of USD 462,963.00, the amount of the second Advance in
            eighty-four (84) consecutive monthly installments of USD 46,296.00,
            the amount of the third Advance in eighty-four (84) consecutive
            monthly installments of USD 127,778.00, and the amount of the fourth
            Advance in eighty-four (84) consecutive monthly installments of USD
            46,296.00, with each such installment to be paid by the Borrowers to
            the Agent on a date commencing on the


EXHIBIT 10.18

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<PAGE>
            day which is thirty (30) days after the date of such Advance, and on
            the same day of each month thereafter and ending on the Maturity
            Date (each such date a "Payment Date"); provided, however, that the
            eighty-fourth (84th) installment for each Advance shall be in an
            amount sufficient to repay all amounts of principal for such Advance
            and, provided further, that the final payment on the Maturity Date
            shall be in an amount sufficient to discharge the accrued and unpaid
            interest and principal in respect of the Note."

4.    The reference in the first line of Section 2.2(c) of the Loan Agreement to
      "third Advance" is hereby changed to "fourth Advance."

5.    Schedule 1 to the Loan Agreement is hereby replaced with Schedule 1
      attached to this Amendment No. 2.

6.    Schedule 2 to the Loan Agreement is hereby replaced with Schedule 2 to
      this Amendment No. 2.

7.    CONDITIONS PRECEDENT.

      7.1 DOCUMENTS REQUIRED AS CONDITIONS PRECEDENT TO AMENDMENT NO. 2. The
      effectiveness of the modifications to the Loan Agreement contemplated by
      this Amendment No. 2 is subject to the condition precedent that the Agent
      shall have received at or prior to the date of such effectiveness (the
      "Amendment Date") all of the following, each dated on or before the
      Amendment Date and each in form and substance satisfactory to the Agent
      and its counsel:

      (a)   Each of the following documents (the "Second Amendment Documents")
            shall have been duly authorized and executed with original
            counterparts thereof delivered to the Agent:

            (i)   This Amendment No. 2;

            (ii)  Amendment No. 2 to the United States First Preferred Fleet
                  Mortgage;

           (iii)  Amendment No. 2 to Vanuatu First Preferred Fleet Mortgage;

            (iv)  the Amended and Restated Note;

            (v)   Ratification of Guaranty executed by the Guarantor; and

EXHIBIT 10.18

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<PAGE>
            (vi)  Amendment No. 1 to Deed of Covenants.


      (b)   The representations and warranties contained in Section 3.1 of
            the Loan Agreement shall be true on the Amendment Date with the
            same effect as though such representations and warranties had
            been made on and as of such date, and no Event of Default
            specified in Article IV of the Loan Agreement and no event which,
            with the lapse of time or the giving of notice and the lapse of
            time specified in Article IV of the Loan Agreement, would become
            such an Event of Default, shall have occurred and be continuing.

      7.2 WAIVER OF CONDITIONS PRECEDENT. All of the conditions precedent
      contained in this Section 7 are for the sole benefit of the Agent and the
      Lenders and the Agent may waive any of them in its absolute discretion,
      and on such conditions as it deems proper.

8.    REPRESENTATIONS OF THE BORROWERS AND GUARANTOR.  The Borrowers and the
      Guarantor represent and warrant that:

      (a)   Each of the Borrowers and the Guarantor is a corporation, duly
            organized and validly existing in good standing under the laws of
            the State of Delaware, and has the requisite power and authority (i)
            to carry on its business as presently conducted; and (ii) to enter
            into and perform its obligations under the Second Amendment
            Documents.

      (b)   The execution, delivery and performance by each of the Borrowers
            and the Guarantor of the Second Amendment Documents and any other
            instrument or agreement provided for by this Amendment No. 2 to
            which it is a party, have been duly authorized by all necessary
            corporate action, do not require stockholder approval other than
            such as has been duly obtained or given, do not or will not
            contravene any of the terms of its Certificate of Incorporation
            or Bylaws, and will not violate any provision of law or of any
            order of any court or governmental agency or constitute (with or
            without notice or lapse of time or both) a default under, or
            result (except as contemplated by this Amendment No. 2) in the
            creation of any security interests, lien, charge or encumbrance
            upon any of its properties or assets pursuant to, any agreement,
            indenture or other instrument to which it is a party or by which
            it may be bound other than is in favor of the Agent; the Second
            Amendment Documents have been duly

EXHIBIT 10.18

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<PAGE>
            executed and delivered by the Borrowers and the Guarantor and
            constitute the respective legal, valid and binding agreements,
            enforceable in accordance with the respective terms thereof as to
            which each of the Borrowers and the Guarantor is a party. The
            enforceability of this Amendment No. 2 or any other Second Amendment
            Document, however, is subject to all applicable bankruptcy,
            insolvency, reorganization, moratorium, and other laws affecting the
            rights or creditors and to general equity principles.

      (c)   Except as set forth in the Loan Agreement, there are no suits or
            proceedings pending or to its knowledge threatened against or
            affecting any Borrower or Guarantor which if adversely determined
            would have a material adverse effect upon its business, financial
            condition or operations.

      (d)   Other than such as have been obtained, no license, consent or
            approval of any Governmental Agency or other regulatory authority
            is required for the execution, delivery or performance of this
            Amendment No. 2 or any other Second Amendment Document or any
            instrument contemplated herein or therein.  The Borrowers are the
            holder of all certificates and authorizations of governmental
            authorities required by law to enable it to engage in the
            business transacted by them.

9.    EXPENSES.  The Borrowers and the Guarantor  agree to promptly, whether
      or not the modifications to the Loan Agreement contemplated by this
      Amendment No. 2 become effective, (x) reimburse the Agent for all fees
      and disbursements of external counsel to the Agent and all reasonable
      out of pocket fees and disbursements of the Agent incurred in
      connection with the preparation, execution and delivery of this
      Amendment No. 2 and all other documents referred to herein, and all
      amendments or waivers to or termination of this Amendment No. 2 or any
      agreement referred to herein; and (y) reimburse the Agent for all fees
      and disbursements of internal and external counsel to the Agent and all
      reasonable out of pocket fees, disbursements and travel-related
      expenses of the Agent incurred in connection with the protection of the
      rights of the Agent under this Amendment No. 2 and all other documents
      referred to herein, whether by judicial proceedings or otherwise.  The
      obligations of the Borrowers and the Guarantor  under this Section 9
      shall survive payment of the Loan.

10.   Wherever and in each such place the term "Loan Agreement" is used
      throughout the Loan Agreement, such term shall be read

EXHIBIT 10.18

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<PAGE>
      to mean the Loan Agreement as amended by this Amendment No. 2.

11.   Except as specifically amended by this Amendment No. 2, all of the
      terms and provisions of the Loan Agreement shall remain in full force
      and effect.

12.   All capitalized terms used herein but not defined herein shall have the
      meanings given to them in the Loan Agreement.

13.   THIS AMENDMENT NO. 2 TO LOAN AGREEMENT SHALL BE GOVERNED BY AND
      CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

      IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
No. 2 to Loan Agreement on the date first written above.

                                    BORROWERS:

                                    HORIZON OFFSHORE CONTRACTORS, INC.



                                    By:___
                                          Name:____
                                          Title:___


                                    HORIZON VESSELS, INC.



                                    By:___
                                          Name:____
                                          Title:___


                                    GUARANTOR:

                                    HORIZON OFFSHORE, INC.


                                    By:___
                                          Name:____
                                          Title:___

EXHIBIT 10.18

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<PAGE>
                                    LENDERS:

                                    THE CIT GROUP/EQUIPMENT FINANCING,
                                        INC.

                                    By:___
                                          Name:____
                                          Title:___

                                    SAFECO CREDIT COMPANY, INC.



                                    By:___
                                          Name:____
                                          Title:___

                                    U.S. BANCORP LEASING & FINANCIAL


                                    By:___
                                          Name:____
                                          Title:___


                                    HELLER FINANCIAL LEASING, INC.


                                    By:___
                                          Name:____
                                          Title:___


                                    TRANSAMERICA EQUIPMENT FINANCIAL
                                      SERVICES CORPORATION


                                    By:___
                                          Name:____
                                          Title:___


                                    PHOENIXCOR, INC.

EXHIBIT 10.18

                                       7
<PAGE>
                                    By:________________________________
                                          Name:_________________________
                                          Title:________________________

                                     AGENT:

                                    THE CIT GROUP/EQUIPMENT FINANCING,
                                        INC.

                                    By:___
                                          Name:____
                                          Title:___

EXHIBIT 10.18
<PAGE>
                                  SCHEDULE 1 TO
                                 LOAN AGREEMENT

      LENDER                        PORTION OF COMMITMENT

1.    The CIT Group/Equipment
      Financing, Inc.               USD 20,000,000

2.    Heller Financial
      Leasing, Inc.                 USD 15,000,000

3.    TransAmerica Equipment
      Financial Service Corp.       USD 18,800,000

4.    U. S. Bancorp Leasing
      & Financial                   USD 10,000,000

5.    Safeco Credit Company,
      Inc.                          USD 5,000,000

6.    Phoenixcor, Inc.              USD 5,000,000


EXHIBIT 10.18
<PAGE>
      SCHEDULE 2 TO

                                                                 LOAN AGREEMENT

                                     VESSELS

      NAME                          FLAG              OFFICIAL NO.
      ----                          ----              ------------

1.    AMERICAN HORIZON              U.S.              294383
2.    CAJUN HORIZON                 U.S.              620491
3.    GULF HORIZON                  U.S.              514595
4.    PACIFIC HORIZON (Derrick)     U.S.              537871
5.    LONE STAR HORIZON             Vanuatu           1157
6.    CANYON HORIZON                Vanuatu           1093
7.    PHOENIX HORIZON               Vanuatu           1037
8.    PEARL HORIZON                 Vanuatu           1156
9.    PACIFIC HORIZON (Barge)       Vanuatu           1100
10.   BRAZOS HORIZON                Vanuatu           1194
11.   DSND STEPHANITURM             Bahamas           725330


EXHIBIT 10.18