KNOT Takes 2024-Built Shuttle Tanker From Parent in 113 Million Deal
The Hedda Knutsen works for Petrobras on firm employment running to November 2034
KNOT Offshore Partners is adding another young shuttle tanker from its parent in a $113m deal, extending a run of fleet renewal transactions while addressing one of its largest near-term debt maturities.
The New York-listed partnership has agreed to acquire the vessel-owning company behind the 2024-built Hedda Knutsen from sponsor Knutsen NYK Offshore Tankers.
The structure keeps the immediate cash outlay small. KNOT will take on $89.4m of outstanding vessel debt and $800,000 of capitalised financing fees, leaving an initial cash cost of about $24.4m, subject to working capital adjustments.
The 154,000 dwt DP2 suezmax was built at COSCO Shipping Heavy Industry and is already working in Brazil for Petrobras. Firm employment runs until November 2034, with the Brazilian energy company holding an option for a further five years.
That contract length is the substance of the transaction. A shuttle tanker on firm charter to Petrobras for eight further years converts directly into visible cash flow, which is the basis on which the partnership finances and distributes.
Once completed, the acquisition will take KNOT Offshore Partners' fleet from 19 to 20 shuttle tankers and continue a steady refresh of its asset base. It is the fourth significant dropdown from Knutsen NYK since September 2024.
Dropdown transactions of this kind move assets from a private sponsor into a listed vehicle at an agreed price, and the terms determine how much of the vessel's contracted earnings accrue to public unitholders rather than to the parent. Assuming existing debt rather than refinancing at the point of transfer keeps the cash requirement low but carries the sponsor's financing terms across with the ship.
Shuttle tankers occupy a specialised niche, loading crude directly from offshore production units and requiring dynamic positioning and bow-loading systems that general-purpose tankers do not carry. Brazil is the largest single market for the tonnage, driven by pre-salt production served without fixed pipeline infrastructure.
