Aker’s decision to build two tankers on spec turns into a winning betApr 29, 2013 03:18 PM
Courtesy Aker Philadelphia Shipyard
The 600-foot, 330,000-barrel tanker Florida passes under the Delaware Memorial Bridge. Owned by Crowley Maritime, the ship will operate under charter to Shell Trading in the Gulf of Mexico.
Aker Philadelphia Shipyard’s decision to build two identical petroleum/chemical tankers without a buyer waiting in the wings appears to be a gamble that has paid off.
Crowley Maritime Corp. christened its newest tanker, Florida, on Jan. 30. The new tanker follows the tanker Pennsylvania, a sister vessel that was delivered to Crowley by Aker Philadelphia Shipyard in September 2012.
The yard, which was on the verge of closing in 2011 before it received a $42 million cash infusion from the state of Pennsylvania, entered into an agreement with Jacksonville, Fla., based Crowley Maritime in August 2012 to purchase the two vessels at a fixed price of $90 million each.
“We began construction on the two vessels without customers. We were and remain confident in the Jones Act’s need for new quality tonnage and (the shipyard’s) ability to build that tonnage,” said Kelly Whitaker, a spokeswoman for the shipyard.
The agreement stipulated that the yard would also receive additional compensation coming from what has been described as a “variable component” based on the performance of the vessel in the marketplace.
The financial arrangement between the Aker shipyard and Crowley is to remain in effect for the economic life of the vessel.
Both tankers are currently under charter to Shell Trading. If the tankers are profitable, Aker could receive an additional $35 million or more from each vessel over its economic life.
Rob Grune, Crowley Maritime’s senior vice president and general manager of petroleum services, said in a written statement that market timing for the purchase was “impeccable.”
“The addition of these new tankers is not only good for our customers, but it is also fantastic for U.S. mariners, our country’s economy and job climate, and for shipyard workers. As a Jones Act operator, we are proud to add value in these areas while serving our customers with safe and reliable petroleum transportation services.”
Grune said that the two new 600-foot, 330,000-barrel capacity tankers will be involved in transporting either crude oil or refined products such as gasoline and jet fuel in the Gulf of Mexico. They will also complement Crowley’s fleet of 17 ATBs, including its new 750-class ATB Legend and 330,000-barrel tank barge 750-2, delivered in September 2012, and Liberty/750-3, scheduled for delivery during the first half of 2013.
The two tankers, Pennsylvania and Florida, are not Crowley’s first tankers. The company owned and operated the 658-foot Blue Ridge and Coast Range, both of which have been retired.
The new tankers, called the Veteran class, are based on a well proven Athenian class 46,000-dwt product tanker from Hyundai Mipo Dockyard in Korea. The design has been modified to conform to U.S. registry and U.S. coastwise trade requirements.
Grune said Crowley had support of major maritime unions — such as the Seafarers International Union; Masters, Mates & Pilots; and American Maritime Officers — in the decision to purchase the Jones Act tankers. Each vessel will employ nine officers and 12 unlicensed American mariners in addition to about 30 shore-side jobs.
Intrepid Personnel & Provisioning of Jacksonville, a Crowley owned company, is responsible for the operation of both vessels.
Tom Bethel, president of the American Maritime Officers, said in a written statement, “From my perspective, Aker’s decision to build and Crowley’s decision to purchase the Pennsylvania and Florida represent an investment in the opportunities presented by existing and emerging domestic energy markets and in the future of the Jones Act fleet. American Maritime Officers represents all licensed officers aboard both ships, and both will have long service lives in the U.S. domestic coastwise trades. This investment translates to enduring and stable employment for AMO officers and our union is proud to be part of this expansion of the U.S.-flag fleet.”
Aker Philadelphia Shipyard describes itself as a leader in the construction of vessels for operation in the Jones Act market. With the sale of Pennsylvania and Florida it seems likely that the shipyard hopes to see that part of its business grow. The tankers are the yard’s 13th and 14th vessels in the class and 17th and 18th new vessels overall (not all are Jones Act vessels).
The yard is now building a 115,000-dwt crude carrier for SeaRiver Maritime Inc., Exxon Mobil’s U.S. affiliate. Delivery is scheduled for 2014.