Photo: Illustration; Source: Unsplash/Shaah Shahidh

Overseas Shipholding Extends Charters for American Shipping Company’s Tanker Quartet

Florida-based tanker shipping company Overseas Shipholding Group (OSG) has exercised options to extend its bareboat charter agreements with Norwegian-American shipowner American Shipping Company for four vessels currently under charter from AMSC.

As informed, each bareboat charter agreement was extended for additional three-year terms, commencing from December 2020 and ending in December 2023.

OSG previously exercised its options to extend charter agreements for all of the six other ships that it leases from AMSC. As a result, all ten bareboat charter agreements with AMSC have now been extended for additional periods.

“The decision to further extend the maturities of each of the four vessels underscores our confidence that the continuing move towards balance in the Jones Act tanker market is an opportunity to serve our core customers in a rate environment that will provide attractive returns over time,” Sam Norton, OSG’s CEO, commented.

The bareboat charter agreements provide that the three- and five-year options for these vessels are available indefinitely. The lease payments for the bareboat charters are fixed throughout the option periods, and the options are on a vessel-by-vessel basis and can be exercised individually.

“We are pleased to see OSG continuing to extend the bareboat charters for our vessels. AMSC benefits from the cash flow stability provided by these contracts and exposure to increasing profits in the future,” Pål Lothe Magnussen, AMSC’s CEO, said.

OSG provides energy transportation services for crude oil and petroleum products in the U.S. Flag markets. The company’s fleet comprises 21 vessels. In addition, OSG has two barges under construction in the U.S. that will be Jones Act qualified vessels, with delivery anticipated during 2020.

Established in 2005, AMSC owns nine Handysize product tankers and one Handysize shuttle tanker on a long-term bareboat charter with OSG.