K-Sea nears end of building program; expanding tug & barge company awaits recovery


K-Sea Transportation Partners, a New Jersey-based company that has expanded its operations to all U.S. coasts in the past decade, recently introduced a 189,000-barrel tug-barge unit intended for service on the U.S. West Coast.

(D. Lund photo)

The articulated tug-barge (ATB) unit comprises the 9,740-hp tug Dublin Sea and the barge DBL 185, both constructed at shipyards of Manitowoc Marine Group, in Sturgeon Bay, Wis., and delivered in late 2009. The company reported total cost of the combined unit to be roughly $70 million.

This is the largest and most powerful tug in the K-Sea fleet and it is also the largest-capacity barge.

Dublin Sea and DBL 185 are operated by K-Sea’s West Coast division headquartered in Seattle, but the pair have been moving oil for Tesoro Corp. in the Gulf of Mexico over the past winter and spring. Dublin Sea and her barge are on long-term charter to Tesoro and the company apparently found more pressing work for them in the Gulf. The company expects they will eventually make their way west to Seattle, however.

K-Sea, which is just about at the end of a long building program, has two more 30,000-barrel barges due out from Jeffboat by the end of this year.

“That will be about it for us, for a while,” said Rick Falcinelli, K-Sea’s executive vice president. “Like everyone else we are going to take a look around now and allow the market to normalize. Then we will see what other opportunities might present themselves.”

Although K-Sea has aggressively expanded its fleet of tugs and barges over the past decade to its present level of roughly 70 tugs and as many barges, Dublin Sea is actually the first new tugboat that the company has built. She is also only the second K-Sea tug and barge unit to be connected with the Intercon coupler system provided by Intercontinental Engineering, of Kansas City, Mo. K-Sea has 16 tugs and 22 barges outfitted with the Beacon Finland JAK-Coupling System, with all the tugs in that group having been retrofitted with the JAK system to match newly-constructed barges.

The only other K-Sea tug to have the Intercon coupler system is the 8,000-hp Lincoln Sea that K-Sea acquired from an ExxonMobil subsidiary, shortly after she was introduced in 2000. In the case of Dublin Sea, the Intercon choice was made primarily because JAK does not have a coupler system large enough for a tug of that size and power. K-Sea reports it inherited the Dublin Sea project a few years ago when it acquired the West Coast company Sirius Maritime, which had already contracted with Tesoro Corp. for the services of a new ATB unit, not yet built.

The Intercon coupler system incorporates a 50-inch pin on each side of the tug. The pin system also includes what Intercon calls its “lightering system” which allows for almost continuous adjustment of the connection height between tug and barge as the draft of the barge changes during at-sea lightering conditions.

Dublin Sea is also the first vessel in the K-Sea fleet to be outfitted with GE engines. The 131-foot tug is powered by a pair of GE 16V-250 four stroke diesel engines. The engines, each weighing more than 25 tons and are 16 feet long, generate 4,870 continuous hp at 900 rpm, according to company specifications.

Those engines are coupled to Reintjes 5.5:1 reduction gears that are shafted to Bird-Johnson five-blade propellers. Auxiliary power comes from a pair of Caterpillar C-9 diesel generators rated at 215 kW and 163 kW. The Safety of Life at Sea-rated tug has tankage for 144,000 gallons of diesel fuel and 19,000 gallons of potable water.

The tug’s massive double-chine hull has a draft of more than 20 feet, while the pilothouse height of eye is 58 feet at loaded draft. On deck the tug has a rigid-hull rescue boat, two cranes and two inflatable life raft canisters. The tug has accommodations for up to 11 crew, many of whom are also employed on the unmanned barge during discharge or loading operations.

While K-Sea has mostly engaged in new construction of barges involving Bollinger Shipyards and, more recently, Jeffboat, the company has also contracted to charter a pair of newly-constructed barges from Zidell Marine Corp., in Portland, Ore. The first of these, DBL 54, is a 50,000-barrel JAK-equipped clean oil barge to be paired up with the recently converted ATB tug Nathan E. Stewart (ex-Ludwig E.) for service on the West Coast. The 95-foot Nathan E. Stewart, built in 2001, is named in memory of former K-Sea employee Nathan Stewart who lost his life during a tragic onboard accident in 2005, according to K-Sea.

The second chartered barge is due out from the Zidell shipyard at the end of this year.

K-Sea, which started out in 1999 with a handful of tugs and barges acquired through a management buyout of Eklof Marine Corp., has built itself to be one of the largest operators of ATBs in the country, almost entirely through acquisition of equipment from other companies and, more recently, through acquisition of other companies and their fleets. The company bills itself as one of the largest operators of coastwise tank barges in the nation.

In the last year, K-Sea reported that it could experience covenant issues with its lenders in 2010 because of decreased demand for transportation of oil products and continuing debt obligations. More recently, however, the company has reported it has been working on solutions to those problems.

“We are working with our banks and we are optimistic about the future and that we are managing our way through those market challenges,” said Falcinelli.

Meanwhile, the company has taken the opportunity, during the recent downturn in utilization of its equipment, to retire as many single-skin tank barges as is practical. Those older barges, all of which must be out of service by 2015, have been sold for scrap, sold overseas, or sold to U.S. buyers who can convert them to alternate service. The percentage of double-hull barges that K-Sea operates in its fleet is now in excess of 90 percent.

Falcinelli also indicated, as cautiously as he could, that with recently-built barges going directly into chartered service, and with the beginnings of recovery visible for petroleum transportation, he is optimistic about future business prospects. “We have positioned the company in the right space to take advantage of future opportunities.

Unofficially, within the last month or two we are starting to see what we hope is the beginning of a recovery in demand,” he said.