North American energy infrastructure company Kinder Morgan, Inc. is expanding its growing fleet of Jones Act product tankers with the addition of four Liquefied Natural Gas (LNG) -conversion ready tankers. The 50,000-deadweight-ton, Tier II tankers will be built by Aker Philadelphia Shipyard, Pennsylvania, at a cost of $568 million.
Each LNG-conversion-ready tanker will have a capacity of 337,000 barrels. The vessels will be delivered to Kinder Morgan between November 2016 and November 2017 and placed in United States domestic service, commonly referred to as the Jones Act (The Merchant Marine Act of 1920) trade. The first two that are scheduled for delivery, in late 2016 and early 2017, are under long-term contract to a creditworthy oil company. Contract discussions for the two tankers to be delivered by late 2017 are ongoing with other creditworthy counterparties, and executed contracts are expected to be completed by early 2016.
The new Tier II tankers obtained in this latest transaction will deliver cargo flexibility, improved fuel efficiency and incorporate the latest environmental protection features, including a Ballast Water Treatment System. Equipped with dual-fuel engines capable of conversion to LNG, the tankers are designed to accommodate an LNG fuel-gas system and type-C LNG tanks in the future.
The transaction requires approval from the shareholders of Philly Tankers AS, the parent company of Philly Tankers LLC. An extraordinary general meeting of shareholders is scheduled in August 2015 for formal approval.
In December 2013, Kinder Morgan Energy Partners acquired American Petroleum Tankers (APT). In March this year, General Dynamics NASSCO hosted a keel laying ceremony for the first ECO tanker for APT, under construction at the company’s shipyard in San Diego. The ECO tanker is the first of a five-tanker contract between General Dynamics NASSCO and APT, which calls for the design and construction of five 50,000 deadweight ton, LNG-conversion-ready product carriers with a 330,000 barrel cargo capacity.
(Source: Kinder Morgan, Inc.)