Kinder Morgan adds four LNG-ready tankers

Kinder Morgan said it has signed a deal with Philly Tankers to take assignment of contracts for the construction of four, new 50,000-deadweight-ton, Tier II LNG-ready tankers to be constructed at the Aker Philadelphia Shipyard in Pennsylvania.

The definitive deal is valued at $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 trade, the company informed in a statement.

The first two that are scheduled for delivery, in late 2016 and early 2017, are under long-term contract to an oil company. Contract discussions for the two tankers to be delivered by late 2017 are ongoing with other counterparties, and executed contracts are expected to be completed by early 2016. Approximately 10 percent of each vessel’s all-in price will be paid upon construction start, with the pro-rata balance due upon each ship’s delivery.

These four new vessels will increase Kinder Morgan’s Jones Act tanker fleet to 16 ships by late 2017, of which 14 are under long-term contracts.

Kinder Morgan currently has seven product tankers on the water and five tankers that are in various stages of design and construction at the NASSCO shipyard in San Diego, California, scheduled for delivery between late 2015 and mid-2017.

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Image: Aker Philadelphia Shipyard

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