NASSCO to build product tankers

USS Product Carriers LLC, a newly created wholly-owned subsidiary of U.S. Shipping Partners LP, has entered into a contract with the National Steel and Shipbuilding Company (NASSCO), a subsidiary of General Dynamics Corporation, for the construction of nine 49,000 dwt double-hulled tankers, and the option to construct five additional tankers. The cost to construct the nine Jones Act tankers is likely to be in the region of $1 billion.

General Dynamics has agreed to provide a performance guarantee to Product Carriers in respect of the obligations of NASSCO under the construction contract. NASSCO is scheduled to deliver the first tanker in the second quarter of 2009, with subsequent tankers delivered every six to eight months.