Kinder Morgan Acquires APT, SCT Tankers

marinelink.com
Monday, December 23, 2013

Kinder Morgan Announces Acquisition of Jones Act Shipping Tankers in U.S. for Approximately $962 Million.

Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today announced it has 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. APT and SCT are engaged in the marine transportation of crude oil, condensate and refined products in the United States domestic trade, commonly referred to as the Jones Act trade.

APT’s fleet consists of five medium range Jones Act qualified product tankers, each with 330,000 barrels of cargo capacity. With an average vessel age of approximately four years, the APT fleet is one of the youngest in the industry. Each of APT’s vessels is operating pursuant to long-term time charters with high quality counterparties, including major integrated oil companies, major refiners and the U.S. Navy. These time charters have an average remaining term of approximately four years, with renewal options to extend the initial terms by an average of two years. APT’s vessels are operated by Crowley Maritime Corporation, which was founded in 1892 and is a leading operator and technical manager in the U.S. product tanker industry.

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.

“This is a strategic and complementary extension of our existing crude oil and refined products transportation business,” said John Schlosser, president of KMP’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. We are purchasing tankers that provide stable fee-based cash flow through multi-year contracts with major credit worthy oil producers.”

“Blackstone and Cerberus are pleased to have founded and built American Petroleum Tankers into a market-leading Jones Act tanker company,” said Sean Klimczak, Senior Managing Director at Blackstone. “We have enjoyed our partnership with APT’s management team and wish them continued success with Kinder Morgan in this next phase of APT’s growth.”

The transaction, which is subject to standard regulatory approvals, is expected to close in the first quarter of 2014, at which time it will be immediately accretive to cash available to KMP unitholders. APT currently generates about $55 million of annual EBITDA. After completion of construction of the four SCT vessels, KMP expects combined annual EBITDA of approximately $140 million, which is an EBITDA multiple of 8.4 times. The general partner of KMP, Kinder Morgan, Inc. (NYSE: KMI), has agreed to waive its incentive distribution amounts of $16 million in 2014 and $19 million in 2015 and $6 million in 2016 to facilitate the 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 more than 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 more than 82,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 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.
 


People & Company News

MobileOps Pursuing Maritime Business

Redmond, Wash. based MobileOps, Inc., a software company specializing in the design and development of maritime software applications (dispatch, safety, compliance,

Half a Century at Sea

Siegfried Schmerer already dreamed of becoming a captain as a young boy. Later, as a sailor on a coaster, he suffered from seasickness. Though he thought about giving up,

MN100: Shock Mitigation

The Company: The company provides marine organizations, boat builders and equipment manufacturers with relevant subject matter expertise plus an independent overview

Legal

Securing the Scorpene: DCNS to Move Court

The French shipbuilder DCNS plans to seek an injunction to prevent further publication of information contained in 22,400 secret documents about stealth submarines built for India,

SOS from Hanjin Shipping

The creditors' extended help is crucial for survival of Hanjin Shipping Co as its negotiations with owners of chartered ships over a cut in leasing rates and to

Hapag-Lloyd Shareholders Okays Merger with UASC

Hamburg-based ocean carrier Hapag-Lloyd said its shareholders approved all items on the agenda at Annual General Meeting, mainly the  share capital increase needed

Tanker Trends

NASSCO Christens LNG-ready Tanker Constitution

On Saturday, August 27, shipbuilders at General Dynamics NASSCO celebrated the christening and launch of the Constitution, the sixth ship in a series of eight eco-friendly

Veg Oils Can Benefit Tankers

A number of product tankers, with certain characteristics, can carry edible oils (also called veg oils) as well as oil products, meaning that veg oil trade should

Worldscale Flat Rates to Fall Again

The concept of Worldscale is not an easy principle to grasp, particularly for those outside the tanker industry, says Weekly Tanker Market Report by Gibson.   The

Finance

California: A Strong Shipbuilding State

Fifth in the nation for direct employment, California shipbuilding and repair industry supports nearly 35,000 jobs; Maritime Administrator highlights economic importance

Advent Hires Banks to Sell Control of Brazil Port

Buyout firm Advent International Corp has hired Morgan Stanley & Co and Grupo BTG Pactual SA to advise on the sale of a controlling stake in TCP Terminal de Contêineres de Paranaguá SA,

SUNY Maritime Among 'Best Bang for the Buck' Colleges

SUNY Maritime College has been named one of the best colleges for its price by Washington Monthly.   SUNY Maritime placed in the top 30 schools in the Northeast.

News

NASSCO Christens LNG-ready Tanker Constitution

On Saturday, August 27, shipbuilders at General Dynamics NASSCO celebrated the christening and launch of the Constitution, the sixth ship in a series of eight eco-friendly

GoM Operators Evacuating Ahead of Storm

Offshore oil and gas operators in the Gulf of Mexico are evacuating platforms and rigs in the path of Tropical Depression No. 9.   The Bureau of Safety and Environmental

White House Sees a Path to Approval of Pacific Trade Deal

The White House on Monday said it was hopeful it could win congressional approval of the Trans-Pacific Partnership trade pact before President Barack Obama leaves office,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Naval Architecture Pipelines Salvage Ship Electronics Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1407 sec (7 req/sec)