October 4, 2007
OSG orders two more from Philly
Aker American Shipping ASA and Overseas Shipholding Group, Inc. (OSG) report that they have signed an agreement under which Aker Philadelphia Shipyard, a subsidiary of Aker American Shipping, will construct two additional Veteran Class MT-46 Jones Act Product Tankers and transfer them to another subsidiary, American Shipping Corporation, which will bareboat charter the vessels to subsidiaries of OSG for initial terms of 10 years.
For Aker American Shipping the full transaction is valued in excess of $240 million (before profit sharing).
In fact. the agreement looks to be a scaling back of the parties' earlier ambitions.
Back in February, Aker American Shipping ASA and OSG announced an agreement in principle under which Aker Philadelphia Shipyard would construct up to six additional Jones Act Product Tankers (three fixed, plus three options) that would be bareboat chartered to subsidiaries of OSG for initial terms of 10-15 years. For Aker American Shipping the deal was valued in excess of $700 million.
Now, as part of the new two ship agreement, "the February 7th 2007 Agreement in Principle for three fixed plus three option vessels has expired."
The two ship order brings the number of Jones Act tankers OSG has committed to charter from Aker to twelve, with delivery dates through 2011.
OSG has already taken delivery of two of the initial 10 tankers, the Overseas Houston and the Overseas Long Beach. The third tanker in the series, Hull 007 (to be named the Overseas Los Angeles), is expected to deliver before the end of 2007.
Aker American Shipping President and CEO Dave Meehan stated, "We are proud to be expanding our fleet from 10 to 12 tankers, and excited for the opportunity to continue exhibiting our expertise in constructing quality merchant vessels. These modern ships are vital to the U.S. Jones Act and we are eager to deliver them to an expanding market in need of quality, double-hulled vessels."