Philly in tanker bonanza

Kvaerner ASA and Overseas Shipholding Group of New York have signed an agreement in principle to bareboat charter ten newly built double-hulled product tankers. Under the agreement, Kvaerner’s subsidiary, Kvaerner Philadelphia Shipyard, will construct the Veteran MT-46 class product tankers, with an option for two additional vessels, and transfer them to another subsidiary which will bareboat charter them to subsidiaries of OSG for initial terms of five or seven years, with extension options for the charterer.

The 46,000dwt tankers will be based on a design purchased from Hyundai Mipo Dockyard and are slated for delivery by mid 2010 at a cost of about $80 million each. OSG will operate the ships at a cost of $500 million over five years. The agreement in principle is subject to, among other conditions, approval by the boards of directors of Kvaerner and OSG, preparation and execution of final agreements and relevant government approvals.

Morten Arntzen, President and Chief Executive Officer of OSG, said “With these charters, OSG will have one of the largest and most modern Jones Act Product Tanker fleets.”