October 4, 2007
U.S. Shipping J.V. gets charter for another Jones Act NASSCO newbuild
U.S. Shipping Partners L.P. (NYSE:USS) says that it has entered into a long-term charter agreement with an unidentified "major oil company" for a new double-hulled product tanker being built for U.S. Shipping Partners' tanker joint venture. This vessel is due for delivery in late 2009 and will be employed in the U.S. domestic coastwise trade.
Paul Gridley, Chairman and CEO, said: "We are very pleased to conclude this new charter. USS has now obtained long-term employment for four of the nine vessels in its newbuilding series."
The partnership, through its subsidiary USS Product Carriers LLC, entered into a contract, effective March 14, 2006, with the National Steel and Shipbuilding Company(NASSCO"), a subsidiary of General Dynamics Corporation ("General Dynamics"), for the construction of nine 49,000 deadweight ton ("dwt") double-hulled tankers. General Dynamics provided a performance guarantee to Product Carriers in respect of the obligations of NASSCO under the construction contract. NASSCO is scheduled to deliver the first tanker in the second quarter of 2009, with subsequent tankers delivered every six to eight months. The Partnership currently expects the cost to construct these nine tankers to aggregate approximately $1.0 billion, exclusive of capitalized interest. The base contract price is subject to increase based on increases in certain published price indexes. In addition, NASSCO and Product Carriers share in any cost savings achieved measured against the original contract price based on the terms of the construction contract. On August 7, 2006, the partnership entered into a joint venture, USS Products Investor LLC, to finance the construction of the first five petroleum tankers.