BG Adds One More from KNOT

zoom British oil and gas company BG Group plc (BG) has exercised option with shuttle tanker owner and operator Knutsen NYK Offshore Tankers (KNOT) for an additional Suezmax-size DP2 shuttle tanker newbuilding for operation in Brazil. BG received an option for a period of one year, to take up to two more shuttle tanker newbuildings within a deal  with KNOT signed in September 12, 2014 for two Suezmax-size DP2 shuttle tanker newbuildings. Following the current exercise of its option for an additional vessel, BG has a remaining option for one more shuttle tanker. The new vessel will be constructed by Hyundai Heavy Industries (HHI) in South Korea, as are the first two vessels. Upon delivery, expected to be in mid-2017, the vessel will commence operations under a time charter for a minimum term of 5 years. If BG exercises all extension options, the vessel would operate under this charter for a period of 20 years. Pursuant to the Omnibus Agreement between KNOT and KNOT Offshore Partners LP, KNOT will be required to offer all three vessels to KNOP at fair market value following each vessel’s commencement of operations under its respective time charter.