Vessels: K-Sea Acquires ITB Unit
K-Sea Transportation Partners has acquired the 140,000 barrel capacity double-hulled barge S/R New York and the 8,000 horsepower tugboat S/R Everett. This integrated tug barge unit, built in 2000, had been leased by SeaRiver Maritime, Inc., a subsidiary of Exxon Mobil Corporation, from a financial institution.
The purchase price of $34 million was financed using available cash and $25 million in borrowings under a new term loan. The new equipment will begin working immediately and is expected to be accretive to K-Sea's distributable cash flow.
K-Sea has also signed a new multi-year contract with SeaRiver to utilize the unit in Exxon Mobil's petroleum products transportation in the Northeast United States. The barge has been renamed DBL 140 and the tugboat has been renamed Lincoln Sea. The addition of this integrated tug barge represents a 5.8% increase to the current barrel-carrying capacity of the K-Sea fleet. By the end of 2004, after the phase-out of certain single-hulled vessels required by the Oil Pollution Act of 1990 and the completion of certain retrofitting projects on other existing vessels, K-Sea's fleet will be approximately 74% double-hulled. "This acquisition is another step in the positioning of K-Sea as a key provider of petroleum products transportation services in the U.S. We are pleased to expand our relationship with Exxon Mobil and to continue to provide safe, reliable, and efficient service to our customers" said Timothy J. Casey, President and CEO of K-Sea.
K-Sea Transportation Partners provides refined petroleum products marine transportation, distribution and logistics services in the northeastern United States and the Gulf of Mexico, and recently began trading its Master Limited Partnership Units on the New York Stock Exchange under the stock symbol KSP.