KMEP to build fifth Jones Act product tanker

Kinder Morgan Energy Partners LP (KMEP) has expanded its contract with General Dynamics Nassco for the design and construction of an additional 50,000 dwt LNG-conversion-ready product tanker with a cargo capacity of 330,000 bbl.

Construction is slated to start in fourth-quarter 2015 with delivery expected in second-quarter 2017. The tanker will be constructed as a sister tanker to the four Jones Act tankers currently under construction at the Nassco shipyard in San Diego.

KMEP in January acquired APT and State Class Tankers for $960 million. At that time, KMEP purchased five operating vessels and noted it would invest an additional $214 million to complete funding for the construction of four new Jones Act-qualified vessels, which will be delivered between November 2015 and October 2016. KMEP says pricing for the additional tanker is consistent with the previously reported transaction.