$568 Million Deal to Build 4 Massive Ships in South Philly

Big news for the Aker Philadelphia Shipyard.

The Aker Philadelphia Shipyard in South Philly.

The Aker Philadelphia Shipyard in South Philly.

Kinder Morgan announced a $568 million deal to purchase four tankers currently being designed and built at the Aker Philadelphia Shipyard in South Philadelphia. The new 50,000-deadweight-ton ships will be able to hold 337,000 barrels of cargo and are being built by Aker’s subsidiary Philly Tankers LLC.

The tankers are expected to be delivered between November 2016 and November 2017.

The deal is still awaiting shareholder approval.

Philly Tankers’ pre-tax gain on the assignment of all four contracts will be approximately $45 million.

“Philly Tankers has made noteworthy achievements since its inception, including securing long-term employment for two of its vessels, the opportunistic exercise of its options and now the assignment of all four of its new building contracts to Kinder Morgan, which provides an attractive return to Philly Tankers’ shareholders,” said Kristian Rokke, chairman of Aker Philadelphia Shipyard and board member of Philly Tankers in a statement.

Steve Kean, president and chief executive officer of Kinder Morgan, said in a statement that prior to this transaction, the company identified a backlog of projects that had grown to $22 billion. “We are seeing numerous opportunities in our core pipelines and terminals businesses as the demand for midstream transportation and storage services continues to grow,” he said.