OSG extends charters of 6 Jones Act tankers

Written by Nick Blenkey
OSG operates Jones act tankers

Overseas Shipholding Group, Inc. (NYSE: OSG) has exercised options to extend its bareboat charter agreements with Oslo-listed AMSC ASA for six Jones Act tankers. The six bareboat charter extensions provide for additional three-year terms commencing in December 2023. With these extensions, seven vessels will continue on lease from AMSC – six with maturity dates aligned to end in December 2026 and one with a maturity of 2025.

“We believe the market continues to support attractive commercial opportunities for these vessel leases to supplement the strong and stable cash flow generation from our niche businesses,” said Sam Norton, OSG’s president and CEO. “There is currently a healthy conventional tanker market, which we believe should continue for the foreseeable future, and are pleased to retain these vessels as key contributors to our steady and strong earnings.”

AMSC ASA said that the extension of the charters increases its bareboat charter backlog by18 vessel years and more than $163 million.

“The extension of six Jones Act product tankers by OSG increases AMSC’s charter backlog considerably and provides clear visibility to our cash flows for the next several years,” said AMSC CEO Pål Lothe Magnussen. “The extensions are also a reflection of the strong Jones Act tanker market in which presently all tankers are on time charter contracts. The lack of newbuild orders due to cost inflation and yard capacity constraints makes it highly unlikely for any new tankers to enter the market anytime soon which bodes well for a continued healthy Jones Act tanker market.”

AMSC, which up until a name change earlier this month was called American Shipping Company, owns 10 Jones Act tankers delivered between 2007 and 2011 by the then Aker Philadelphia Shipyard (now Philly Shipyard).

Originally, all 10 were on bareboat charter to OSG. However, back in December 2021, OSG announced that it would not be exercising extension options for three other vessels. Those three vessels were subsequently all chartered in by Keystone Shipping.

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