Philly Shipyard Secures $150 Million Loan for Tankers

Philly Shipyard – formerly Aker Philadelphia – has announced that it has secured a $150 million credit facility from Cat Financial for the construction of four tankers for Kinder Morgan. The loan is part of a multi-year partnership between Cat and Philly. 

The four tankers will have a capacity of over 300,000 barrels apiece, with delivery from 2016 through 2017. They will be LNG-conversion ready and will expand Kinder Morgan's existing Jones Act domestic fleet to a total of 16 ships, 14 of which are already under long-term charter.

The 50,000 dwt vessels were originally ordered by Philly Tankers LLC. Kinder Morgan acquired purchasing rights earlier this year in a transaction totalling $600 million; the first two tankers are already under charter to an oil transportation operator, and negotiations are ongoing for the remaining two.

“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,” said Kinder Morgan President John Schlosser. “This latest transaction clearly underscores Kinder Morgan’s commitment to marine transportation of crude oil, condensate and refined products in the U.S. domestic trade.”

The yard also just delivered the second of four new product tankers for Crowley, the Texas, which has a capacity of 15 million gallons and is dual fuel LNG-ready. The vessel is the twenty-second built by the yard. Philly has also begun construction of two 3,600 TEU container ships for Matson Navigation.

Philly Shipyard is owned by industrial conglomerate Aker ASA of Norway and is listed on the Oslo exchange.