Knot Offshore Partners Lp
We were formed to own and operate shuttle tankers under long-term charters.
Our primary business objective is to increase quarterly distributions per unit
over time by growing our business through accretive acquisitions of shuttle
tankers and by chartering our vessels pursuant to long-term charters with high
quality customers that generate long-term stable cash flows. All of the vessels
in our current fleet are chartered to Statoil, Transpetro, Repsol, BG Group,
ExxonMobil and ENI under long-term charters.
Pursue strategic and accretive acquisitions of shuttle tankers on long-term,
fixed-rate charters. We seek to leverage our relationship with KNOT to make
strategic and accretive acquisitions. Under the Omnibus Agreement, we have the
right to purchase the Raquel Knutsen, on time charter to Repsol, from KNOT within
24 months of its acceptance by Repsol. Additionally, during the term of the
Omnibus Agreement, we have the opportunity to purchase from KNOT any newbuild
under a long-term charter or existing shuttle tanker in the KNOT fleet that
enters into a long-term charter.
Expand global operations in high-growth regions. We seek to expand in proven
areas of offshore production, such as the North Sea and Brazil, and in new production
areas as they are developed. We believe that KNOT’s leading market position,
operational expertise and strong customer relationships will enable us to have
early access to new production projects worldwide.
Manage our fleet and deepen our customer relationships to continue to provide
a stable base of cash flows. We intend to maintain and grow our cash flows by
focusing on strong customer relationships and actively seeking the extension
and renewal of existing charters in addition to new opportunities to serve our
customers. KNOT charters its current fleet to a number of the world’s
leading energy companies. We believe the close relationships that KNOT has with
these companies will provide attractive opportunities for us. We continue to
incorporate safety, health, security and environmental stewardship into all
aspects of vessel design and operation in order to satisfy our customers and
comply with national and international rules and regulations.
A shuttle tanker is a specialized vessel designed to transport crude oil and
condensates from offshore oil field installations to onshore terminals and refineries.
Shuttle tankers are equipped with sophisticated loading systems and dynamic
positioning systems that allow the vessels to load cargo safely and reliably
from oil field installations, even in harsh weather conditions.
Shuttle tankers are often described as “floating pipelines,” because
these vessels typically shuttle oil from offshore installations to onshore facilities
in much the same way a pipeline would transport oil along the ocean floor. Shuttle
tankers can be either purpose-built or converted from existing conventional
oil tankers.
The advantages of shuttle tankers as compared to pipelines include:
the use of shuttle tankers is a more flexible option than pipelines
for the transportation of oil from the oil field to onshore terminals and provides
destination flexibility for the customers;
shuttle tankers provide a more flexible solution to declining production
profiles and abandonment as a pipeline has a fixed capacity, whereas shuttle
tanker capacity may be adjusted through reduced frequency of calls or reduced
number of vessels serving a field;
shuttle tanker operators may provide back-up capacity during times when
existing transportation infrastructure is closed for maintenance or otherwise
unavailable, which would enable uninterrupted production;
shuttle tankers require less significant up-front investment than pipelines;
and
shuttle tankers provide customers the benefit of purchasing unblended
crude qualities, whereas pipelines usually provide a blend of different crude
qualities as several oilfields may be connected to the same pipeline. A shuttle
tanker may load at several fields during one single voyage, but oil from different
fields may be kept separated in different compartments onboard.
Shuttle tankers primarily differ from conventional oil tankers based on two
significant features. First, shuttle tankers are fitted with position-keeping
equipment enabling them to remain in a position without the assistance of tugs
or mooring to installations. Second, shuttle tankers are equipped with bow-loading
equipment and, in some cases, also fitted with equipment for submerged turret
loading. Conventional oil tankers load from an offshore field installation usually
through a taut hawser (mooring line onboard the discharging unit) operation
and/or with tug assistance. In certain cases, dedicated shuttle tanker newbuilds
are required to service the specific requirements of oil fields and installations.
At times, conventional oil tankers can be converted to shuttle tankers after
a substantial upgrade and investment in equipment.