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Marine Log

November 27, 2007

Aker American places $1.3 billion with Aker Philly

Aker American Shipping ASA, which is now a straight shipowning company, has entered into an option agreement with the newly separated Aker Philadelphia Shipyard ASA to build up to 13 product tankers at a total contract value of $1.3 billion.

With this agreement, Aker American Shipping aims to expand its fleet, from 12 to 25 state-of-the- art vessels.

"We have a unique position in the U.S. market, and our goals are ambitious, says Aker American Shipping's President and CEO Robert Kurz.

Aker American's fleet comprises ten product tankers and two shuttle tankers, all of which are chartered to Overseas Shipholding Group (OSG) under bareboat charter agreements. OSG has already time-chartered 11 of these vessels to oil companies and refineries in the U.S.

The new agreement with Aker Philadelphia Shipyard allows for a fleet expansion by an additional 13 vessels, for delivery between July 2011 and July 2015. The vessels are of the 46,000 dwt Veteran MT-46 Jones Act product tanker design; they can be easily modified to allow for deployment as shuttle tankers or chemical carriers.

Each vessel has an agreed-to price of $100 million; however, under the agreement, the final contract value will be adjusted to reflect inflation and cover escalation for materials, equipment and services cost increases from 201

"Aker Philadelphia Shipyard is the most modern and cost-effective shipyard in the United States. We already have a solid order book, and we are accruing cost-saving experience and productivity gains. The outlook is promising," says Aker Philadelphia Shipyard's President and CEO Dave Meehan.

Aker Philadelphia Shipyard has delivered three product tankers in 2007. Under the current newbuilding program, an additional seven product tankers and two shuttle tankers will be delivered from 2008 to 2011. The agreement announced today allows for an expanded new build program for up to 13 additional vessels from July 2011 to July 2015.