Overseas Shipholding Group has exercised options to extend its charter agreements with American Shipping Company for nine tankers.
The company informed that charter agreements for five of the vessels were extended for additional three-year terms, commencing from December 2019 and ending in December 2022. Deals for the remaining four vessels were extended for one-year terms commencing from December 2019 and ending in December 2020.
OSG previously exercised its option to extend its charter agreement for the 10th vessel that it leases from AMSC, stretching the deal into 2025. As a result, all ten bareboat charter agreements with AMSC have now been extended for additional periods.
“The extension of charter agreements on all of the vessels provides for continuity of our existing tanker operations. At the same time, OSG retains continued flexibility afforded by the serial options remaining, a feature of our contracts which has always been appealing,” Sam Norton, OSG’s CEO, said.
The charter agreements provide that each one-year option is only usable once, while the three- and five-year options are available indefinitely. The lease payments for the charters-in are fixed throughout the option periods, and the options are on a vessel-by-vessel basis and can be exercised individually.