KNOT Offshore Partners LP announced today an agreement with Brazil Shipping I Limited, an affiliate of BG Group (“BG”) for the time charter of the vessel Windsor Knutsen. The hire rate for the initial term is in line with the rate in the existing charter with BG.
The charter has an initial term of two years. BG has options to extend the term of the charter for three additional one-year periods. The charter will start in or around the fourth quarter of 2015. If all three extension options are exercised, the Windsor Knutsen will operate for BG until the end of 2020. The shuttle tanker will operate in Brazil.
BG has recently notified the Partnership that the Windsor Knutsen will be redelivered under its existing charter at the end of July 2014.
The process of reemploying the vessel prior to the start of its new charter with BG is ongoing. Pursuant to the Partnership’s Omnibus Agreement with Knutsen NYK Offshore Tankers AS (“Knutsen”), in the event the Windsor Knutsen is not receiving from any charterer a rate of hire that is equal to or greater than the rate of hire that would have been in effect in the event BG had exercised its option under the existing Windsor Knutsen charter, Knutsen will pay the Partnership such rate of hire that would have been in effect for a period up to April 15, 2018, subject to certain limitations as described in the agreement.
KNOT owns, operates and acquires shuttle tankers under long-term charters in the offshore oil production regions of the North Sea and Brazil. KNOT is structured as a master limited partnership. KNOT’s common units trade on the New York Stock Exchange under the symbol “KNOP.”