Kinder Morgan Energy Partners, L.P., said Monday it had entered into a definitive agreement to acquire American Petroleum Tankers (APT) and State Class Tankers (SCT) from affiliates of The Blackstone Group and Cerberus Capital Management for $962 million in cash.
The two tanker companies are engaged in the domestic or Jones Act marine transportation of crude oil, condensate and refined products.
“This is a strategic and complementary extension of our existing crude oil and refined products transportation business,” said John Schlosser, president of Kinder Morgan’s terminals segment. “Product demand is growing, and sources of supply continue to change, in part due to the increased shale activity. As a result, there is more demand for waterborne transportation to move these products.”
APT’s fleet consists of five medium-range Jones Act-qualified product tankers, each with 330,000 barrels of cargo capacity. Built in 2009 and 2010, one tanker each is on charter to BP, Shell and Chevron, and another is on charter to the Military Sealift Command.
APT’s vessels are operated by Crowley Maritime Corporation.
SCT has commissioned the construction of four medium-range Jones Act-qualified product tankers, each with 330,000 barrels of cargo capacity. The vessels are scheduled to be delivered in 2015 and 2016, and are being constructed by General Dynamics’ NASSCO shipyard. Upon delivery, the SCT vessels will be operated pursuant to long-term time charters with a major integrated oil company. Each of the time charters has an initial term of five years, with renewal options to extend the initial term by up to three years. Kinder Morgan will invest approximately $214 million to complete the construction of the SCT vessels.