APT Places One More ECO MR Tanker Order with NASSCO

General Dynamics NASSCO has entered into a contract with American Petroleum Tankers (APT), a wholly owned subsidiary of Kinder Morgan Energy Partners, for the design and construction of an additional 50,000 deadweight ton LNG-conversion-ready product carrier with a 330,000 barrel cargo capacity.

Artist Rendering (NASSCO)

Construction is scheduled to begin in the fourth quarter of 2015, with delivery scheduled for the second quarter of 2017. This new tanker, supported by a long-term charter, will be constructed at the NASSCO shipyard in San Diego, meeting the Jones Act requirement that ships carrying cargo between U.S. ports be built in U.S. shipyards.

This new 610-foot-long tanker is a continuation of the ECO MR tanker design, which delivers improved fuel efficiency and incorporates the latest environmental protection features, including a Ballast Water Treatment System. Including this order, NASSCO is now under contract for the design and construction of eight tankers: five for American Petroleum Tankers and three for Seabulk Tankers, Inc.

All eight ships are being designed by DSEC, a subsidiary of Daewoo Shipbuilding & Marine Engineering (DSME) of Busan, South Korea. DSEC’s ECO design achieves improved fuel efficiency through several features, including a G-series MAN ME slow-speed main engine and an optimized hull form. The tankers will have conversion-capable, dual-fuel-capable engines and the ability to accommodate the future installation of an LNG fuel-gas system and Type C LNG tanks.

Kevin Graney, vice president and general manager of General Dynamics NASSCO, said, “This additional order, plus NASSCO’s existing backlog of tankers and containerships, is a clear indication that NASSCO is the shipyard of choice for Jones Act vessel construction.”

Rob Kurz, vice president of Kinder Morgan Terminals and president of KMP subsidiary APT,
commented, “This new order clearly demonstrates APT’s and Kinder Morgan’s continued commitment to the Jones Act tanker market.”

“There continues to be increasing demand for waterborne transportation to move petroleum products, and these tankers will provide stable, fee-based cash flow to KMP unitholders for many years to come through multi-year contracts with major oil producers.”

KMP acquired APT and State Class Tankers for $960 million in cash in January of 2014. At that time, KMP purchased five operating vessels and noted it would invest an additional $214 million to complete funding for the construction of four new Jones Act-qualified vessels, which will be delivered between November 2015 and October 2016.

 

Press Release, June 17, 201

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