New York-listed KNOT Offshore Partners LP (‘the Partnership’) has agreed to acquire the 2022-built DP2 shuttle tanker Daqing Knutsen from Knutsen NYK Offshore Tankers AS (KNOT), the company KNOT Offshore Partners LP reported on Wednesday, July 2.
The Daqing Knutsen, a 154,000-deadweight ton DP2 suezmax class shuttle tanker, was built by COSCO Shipping Heavy Industry and delivered in 2022.
The vessel is operating in Brazil on a charter contract with PetroChina, for which the current fixed period expires in July 2027, and for which the charterer holds options for a further 5 years.
As a term of the acquisition, KNOT has guaranteed the hire rate for the vessel until July 2032 on the same basis as if PetroChina had exercised its option through such date, providing the Partnership with approximately 7 years of fixed employment for Daqing Knutsen, according to statement by KNOT Offshore Partners LP.
“By successfully executing the dropdown of the Daqing Knutsen in conjunction with the attractively-priced sale-leaseback of one of our existing vessels, we are pleased to have once again agreed an accretive vessel acquisition that grows our fleet in the most in-demand shuttle tanker class, reduces our average fleet age, and improves the value and duration of our long-term charters, all without drawing on our available liquidity,” Derek Lowe, CEO of KNOT Offshore Partners LP said.
Meanwhile, KNOT Offshore Partners LP reported that the outstanding debt of the 2020-built suezmax Tove Knutsen is expected to be refinanced by means of a sale and leaseback transaction, which would generate approximately $32m of proceeds.
The Partnership, through its wholly-owned subsidiary, Knutsen Shuttle Tankers 34 AS, which owns the Tove Knutsen, expects to sell the Tove Knutsen to, and lease her back from, a Japanese-based lessor for a lease period of 10 years. The gross sale price is $100m and a portion of the proceeds will be used to repay the outstanding loan secured by the vessel and to settle the related interest rate swaps.
Following closing and after repayment of the loan and settlement of the interest rate swaps, the Partnership expects to realize net proceeds of approximately $32m after fees and expenses.
The Tove Knutsen is currently en route to a scheduled drydocking, which is due to commence in mid-July, following completion of a conventional tanker charter which utilised her voyage to Europe.
It’s worth mentioning that KNOT Offshore Partners LP owns, operates and acquires shuttle tankers primarily under long-term charters in the offshore oil production regions of Brazil and the North Sea.
