Kinder Morgan Energy Partners, L.P. (NYSE: KMP) announced that it has entered into a definitive agreement to acquire American Petroleum Tankers (APT) and State Class Tankers (SCT) for $962 million.
So why Kinder Morgan (KM) wants to integrate marine trade into their energy midstream portfolio ?
Kinder Morgan (KM) is a company used to deal with long-term regulated investments and low commodity price risk exposure.
S/D Curves are pushing JA Tanker spot rates higher.
If Jones Act Tankers are the sweet spot in the long-term why the Blackstone Group and Cerberus Capital Management, two Hedge Fund behemoths are selling ? A medium-range tanker with a capacity of 50,000 DWT costs as much as $120 million to build domestically, more than 3 times the the cost of a new construction in a foreign shipyard and high daily operating expenses.
However it is cash flow that matters and Private Equity and The Joneses by Karatzas Marine Advisors & Co. provides generous insights about JA valuation and the deal.
As per SEC filings, direct vessel daily operating expenses stand at about $20,000 pd, but taking into account management fees and other expenses, the daily cost is higher by several thousand dollars. The five APT tankers are grossly expected to generate $60 mil EBITDA per annum, implying about $60,000 per day T/C for each of the four SCT tankers (again, with firm five year fixed charter to investment grade oil major. – Shipping Finance by Karatzas Marine, Equity, Debt, Leasing, Advisory & Restructuring.
-The Trade Shipping and Finance Wizard