Philly Tankers AS Okays USD 568 Million Resale Deal with Kinder Morgan

Majority of investors at the tanker operator Philly Tankers AS have agreed to sell the contracts for four tankers to be built by Aker Philadelphia Shipyard to a subsidiary of the energy infrastructure company Kinder Morgan for USD 568 million.

On August 10, Kinder Morgan signed a definitive agreement with Philly Tankers LLC, a U.S. subsidiary of Philly Tankers AS, to take assignment of contracts for the construction of four new 50,000 dwt, Tier II tankers.

The Extraordinary General Meeting of the shareholders of Philly Tankers AS was held on September 2, where shareholders accounting for 87.21% of the shares in the company voted to approve the transaction.

Each LNG-conversion-ready tanker will have a capacity of 337,000 barrels. The Jones Act vessels will be delivered to Kinder Morgan between November 2016 and November 2017.

The first two that are scheduled for delivery in late 2016 and early 2017 are under long-term contracts. Contract discussions for the two tankers to be delivered by late 2017 are ongoing, 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.

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