Kinder Morgan acquires four LNG tankers

Under the agreement, Kinder Morgan will take assignment of contracts for the construction of the tankers to be built at the Aker Philadelphia Shipyard in Philadelphia, Pennsylvania. Each LNG-conversion-ready tanker will have a capacity of 337,000 barrels.

“There continues to be strong demand for domestic waterborne transportation to move petroleum products and crude oil, and our fleet of highly efficient tankers will provide stable, fee-based cash flow to KMI shareholders for many years to come through multi-year contracts,” said John Schlosser, president, Kinder Morgan Terminals.

“This latest transaction clearly underscores Kinder Morgan’s commitment to marine transportation of crude oil, condensate and refined products in the US domestic trade,” he added.

Kinder Morgan currently has seven product tankers on the water and five tankers that are in various stages of design and construction at the NASSCO shipyard in San Diego, California, scheduled for delivery between late 2015 and mid-2017.

Kinder Morgan says the new Tier II tankers will deliver cargo flexibility, improved fuel efficiency and incorporate the latest environmental protection features, including a Ballast Water Treatment System.

These four new vessels will increase Kinder Morgan’s Jones Act tanker fleet to 16 ships by late 2017, of which 14 are under long-term contracts.

Delivery is scheduled between November 2016 and November 2017. The vessel will then be placed in United States domestic service, commonly referred to as the Jones Act trade.

Kinder Morgan entered the Jones Act product tanker business with an initial purchase of five vessels in January of 2014 via the acquisition of American Petroleum Tankers and State Class Tankers for US$960m.