Overseas Shipholding Group, Inc. (NYSE: OSG) has exercised choices to increase its bareboat constitution agreements with Oslo-listed AMSC ASA for six Jones Act tankers. The six bareboat constitution extensions present for extra three-year phrases commencing in December 2023. With these extensions, seven vessels will proceed on lease from AMSC – six with maturity dates aligned to finish in December 2026 and one with a maturity of 2025.
“We believe the market continues to support attractive commercial opportunities for these vessel leases to supplement the strong and stable cash flow generation from our niche businesses,” stated Sam Norton, OSG’s president and CEO. “There is currently a healthy conventional tanker market, which we believe should continue for the foreseeable future, and are pleased to retain these vessels as key contributors to our steady and strong earnings.”
AMSC ASA stated that the extension of the charters will increase its bareboat constitution backlog by18 vessel years and greater than $163 million.
“The extension of six Jones Act product tankers by OSG increases AMSC’s charter backlog considerably and provides clear visibility to our cash flows for the next several years,” stated AMSC CEO Pål Lothe Magnussen. “The extensions are also a reflection of the strong Jones Act tanker market in which presently all tankers are on time charter contracts. The lack of newbuild orders due to cost inflation and yard capacity constraints makes it highly unlikely for any new tankers to enter the market anytime soon which bodes well for a continued healthy Jones Act tanker market.”
AMSC, which up till a reputation change earlier this month was known as American Shipping Company, owns 10 Jones Act tankers delivered between 2007 and 2011 by the then Aker Philadelphia Shipyard (now Philly Shipyard).
Originally, all 10 have been on bareboat constitution to OSG. However, again in December 2021, OSG introduced that it could not be exercising extension choices for 3 different vessels. Those three vessels have been subsequently all chartered in by Keystone Shipping.
