Knutsen NYK Offshore Tankers AS (KNOT) has concluded a time-charter contract with Brazil Shipping 1 Limited, a subsidiary of the U.K. energy supplier BG GROUP PLC.
This contract is for a maximum 20-year period starting from the second quarter of 2017 and follows the time-charter contracts that were concluded in September 2014 for two shuttle tankers.
The new contract aims to use a 158,000 DWT Suezmax tankers built by Hyundai Heavy Industries Co. Ltd. and equipped with enhanced dynamic-positioning systems to shuttle crude oil processed in waters off Brazil.
Upon delivery, expected to be in mid-2017, the vessel will commence operations under a time charter with BG (this will have a minimum term of 5 years). If BG exercises all extension options, the vessel would operate under this charter for a period of 20 years.
BG has exercised its option for an additional Suezmax-size DP2 shuttle tanker newbuilding for operation in Brazil. BG GROUP PLC owns interests in oil and gas fields in the waters off Brazil and is one of the major players in this area.
Upon commencement of this tanker contract, the KNOT Group will have 32 shuttle tankers in operation or on order.
In accordance with its medium-term management plan “More Than Shipping 2018,” NYK will continue its efforts to provide stable and economical energy transport services, such as those that are part of the company’s shuttle tanker and offshore business.
Knot is seeking to tap the growing offshore market, with Brazil's shuttle crude business a key focus area. The latest deal will boost the venture's shuttle tanker fleet to 32.
KNOT currently owns eight shuttle tankers, which are vessels designed to transport crude oil and condensates from offshore oil field installations to onshore terminals and refineries.