KNOT Offshore Partners LP
We are a limited partnership formed in February 2013, to operate and acquire shuttle tankers under long-term charters, which we define as charters of five years or more. We are majority-owned by Knutsen NYK Offshore Tankers AS (KNOT), a market leading independent owner and operator of shuttle tankers, which is jointly owned by TS Shipping Invest AS (TSSI), and Nippon Yusen Kaisha (NYK). TSSI controlled by our Chairman, is a private Norwegian company with ownership interests in shuttle tankers, liquefied natural gas (LNG), tankers and product/chemical tankers. NYK is a Japanese public company with a fleet of approximately 800 vessels, including bulk carriers, containerships, tankers and specialized vessels. As of December 31, 2013, KNOT owns a 49% limited partner interest in us and, through its ownership of our general partner, a 2% general partner interest in us, as well as our incentive distribution rights.
We currently own and operate a modern fleet of five state of the art shuttle tankers, each under long term charters with major oil and gas companies engaged in offshore productions, such as BG Group, Statoil and Transpetro. It is our strategy to operate our vessels under long-term charters with stable cash flows and to grow our position in the shuttle tanker market through acquisitions from KNOT and third parties. Pursuant to our omnibus agreement with KNOT, we have the right to purchase from KNOT four newbuilds, three delivered to charterers during 2013 and one due to be delivered in 2014. Additionally pursuant to this omnibus agreement, we also have the right to purchase from KNOT any shuttle tankers operating under charters of five or more years. This right will continue throughout the entire term of the omnibus agreement. We also believe we can grow organically by continuing to provide reliable customer service to our charterers and leveraging KNOT’s relationships, expertise and reputation.
A shuttle tanker is a specialized ship 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 were developed in the North Sea in 1977 as an alternative to pipelines