July 2, 2007
U.S. Shipping Partners takes delivery of ATB
U.S. Shipping Partners L.P. (NYSE:USS) today announced the delivery of its new articulated tug barge unit ("ATB"), the pusher tug Freeport and the parcel barge Chemical Transporter (together, the "ATB Freeport").
This 19,999 dead weight ton IMO I ATB is capable of carrying 140,000 barrels of the most sophisticated chemical cargos transported by seagoing vessels. The ATB Freeport is the first of five ATBs U.S. Shipping Partners L.P. has contracted to construct as part of its fleet expansion program.
The partnership believes the ATB Freeport is the first IMO I ATB to be constructed in the United States. It reports that the ATB has successfully completed sea trials and has received necessary certification by the U.S. Coast Guard and the American Bureau of Shipping. But it says "as is customary in newbuilding situations for the first of a series of vessels, there are a few documentation related items that we need to address following delivery of the vessel. "
"These items do not affect our ability to begin operating the ATB Freeport in our chemical service, and we do not anticipate any problem in satisfactorily addressing these items within the required time frames," says the partnership.
Getting the ATB from concept to reality has caused U.S. Shipping Partners some well-publicized problems.
"We currently estimate the total cost of the ATB Freeport will be approximately $91 million, excluding capitalized interest and net of a $21 million settlement with the original builder," says Paul Gridley, Chairman and CEO of U.S. Shipping Partners L.P. "The partnership took over construction of the ATB Freeport when the original builder breached its contractual obligations to the partnership. As a result, there were substantial delays and cost overruns associated with this ATB unit. The partnership believes it has valid claims which, if recovered, will reduce this gross amount."
The new vessel departed what the partnership identifies only as "the shipyard" on July 1, 2007 for its first load port in Louisiana and following completion of two routine design verification test procedures and arrival at the load port, it will lift its first cargo, which is anticipated to occur at the end of this week.
The vessel is already covered with contracts of affreightment with major customers.
"We believe the ATB Freeport is the most technologically advanced ATB in the U.S. flag Jones Act deep sea trade," says Gridley. "The features we built into this unit include ten cargo tanks with flat internal surfaces, individual stainless steel deck mounted cargo heaters, stainless steel cargo piping, radar tank gauging, and advanced automatic tank cleaning. The ATB Freeport's propulsion system runs on heavy fuel, which at current fuel prices yields significant operating cost savings in comparison to traditional diesel engines."
As previously announced, the partnership has entered into contracts with Manitowoc Marine Group of Marinette, WI and Eastern Shipbuilding Group, Inc. of Panama City, FL to construct three additional ATBs of similar design, which are specified to have a carrying capacity of approximately 156,000 barrels at 98% capacity. In addition, the partnership has a fourth barge on order from Manitowoc Marine Group. The option to cancel such barge has been extended until August 2, 2007. The contract with Eastern Shipbuilding Group includes an option to construct and deliver a fourth tug, which must be exercised by August 1, 2007. The Partnership is continuing to evaluate its financing options with regard to the fifth ATB unit of the series, including a possible sale and leaseback of the first ATB unit.