Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today announced it has expanded its contract with General Dynamics NASSCO for the design and construction of an additional 50,000 deadweight ton LNG-conversion-ready product tanker with a 330,000-barrel cargo capacity. Construction is scheduled to begin in the fourth quarter of 2015 with delivery slated for the second quarter of 2017. This new tanker will be constructed as a sister tanker to the four Jones Act tankers KMP currently has under construction at the NASSCO shipyard in San Diego.
“We are delighted to build an additional tanker (supported by a long-term charter with a major shipper), which clearly demonstrates Kinder Morgan’s ongoing commitment to marine transportation of crude oil, condensate and refined products in the United States domestic trade, commonly referred to as the Jones Act,” said Rob Kurz, vice president of Kinder Morgan Terminals and president of KMP subsidiary American Petroleum Tankers (APT). “There continues to be increasing demand for waterborne transportation to move petroleum products, and these tankers will provide stable, fee-based cash flow to KMP unitholders for many years to come through multi-year contracts with major oil producers.”
As previously announced, KMP acquired APT and State Class Tankers for $960 million in cash in January of 2014. At that time, KMP purchased five operating vessels and noted it would invest an additional $214 million to complete funding for the construction of four new Jones Act-qualified vessels, which will be delivered between November 2015 and October 2016. Pricing for the additional tanker is consistent with the previously announced transaction.
Kinder Morgan Energy Partners, L.P. (NYSE: KMP) is a leading pipeline transportation and energy storage company and one of the largest publicly traded pipeline limited partnerships in America. It owns an interest in or operates approximately 54,000 miles of pipelines and 180 terminals. The general partner of KMP is owned by Kinder Morgan, Inc. (NYSE: KMI). Kinder Morgan is the largest midstream and the fourth largest energy company in North America with a combined enterprise value of approximately $105 billion. It owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO 2 and other products, and its terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke and steel. KMI owns the general partner interests of KMP and El Paso Pipeline Partners, L.P. (NYSE: EPB), along with limited partner interests in KMP and EPB and shares in Kinder Morgan Management, LLC (NYSE: KMR). For more information please visit www.kindermorgan.com.This news release includes forward-looking statements. These forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although Kinder Morgan believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include those enumerated in Kinder Morgan’s reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they were made, and except to the extent required by law, Kinder Morgan undertakes no obligation to update or review any forward-looking statement because of new information, future events or other factors. Because of these uncertainties, readers should not place undue reliance on these forward-looking statements.