General Dynamics NASSCO, U.S. Shipping Partners Finalize $1 Billion Contract for New Tankers.
General Dynamics NASSCO, a wholly owned subsidiary of General Dynamics, has finalized a $1 billion contract with U.S. Shipping Partners L.P. to build nine product carrier tankers.
The contract, announced yesterday, includes options for five additional ships. Construction of the first tanker is scheduled to begin in the third quarter of 2007, with delivery to occur by the second quarter of 2009.
"NASSCO is the leading builder of U.S. Navy auxiliary ships and has delivered more Jones Act ships than any other shipyard in the country today," said Frederick J. Harris, president of General Dynamics NASSCO. "This contract is the largest commercial shipbuilding contract in NASSCO's history and positions this shipyard to remain the premier builder of Jones Act ships."
The product carrier tankers, or PCs, will be 183 meters (600.4 feet) in length and 32.2 meters (105.6 feet) in beam, with a design draft of 11.8 meters (38.7 feet). The ships are to be double hulled, weigh 49,000 dead weight tons (DWT) and have a cargo capacity of 331,000 barrels.
"USS is committed to building and operating the largest, most technologically advanced deep water fleet in the United States," said Paul Gridley, chairman and CEO of U.S. Shipping Partners L.P. "These new ships will allow us to add the needed new capacity that the domestic energy market is demanding.
"Additionally, given the regulatory requirements to upgrade the fleet operating under the Jones Act, General Dynamics' NASSCO is a tremendous partner to provide us with a superior product that meets these requirements, in a timely fashion," said Gridley. "These new ships will allow USS to expand our domestic shipping business, while providing our customers with the high-quality, reliable transport they require for their petroleum and chemical products."
USS operates a fleet of 10 deep sea vessels that carry refined petroleum and chemical products among customer facilities along the U.S. coast and has five double-hulled, articulated tug barges on order or under construction. The majority of the USS fleet is on long-term time charters or contracts of affreightment with major oil and chemical companies based in the United States.
Financing for the transaction is being provided by a joint venture among affiliates of the Blackstone Group; USS Product Carriers, a wholly owned subsidiary of USS; and other investors. Investment banking services were provided by Lehman Brothers and CIBC World Markets, with Sterling Investment Partners, a controlling partner of USS, providing advisory services negotiating and structuring the transaction.
The PC tankers are based on an existing design from DSEC, a wholly owned subsidiary of Daewoo Shipbuilding and Marine Engineering of Seoul, Korea. NASSCO entered into an agreement with DSEC last March to produce ships for the U.S. market under the Jones Act, in which DSEC will provide detail designs and services related to construction of the ships. All of the ships will be constructed at the NASSCO shipyard in San Diego.
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|Date:||Aug 8, 2006|
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