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Houston-based Kirby Corporation announced this week plans to construct an additional 29 tank barges totaling more than 850,000 barrels of new capacity to be delivered throughout 2014.
Kirby Corp., the nation’s largest domestic tank barge operator, says it has signed agreements to construct 29 30,000 barrel inland tank barges for a total capacity of 870,000 barrels. Kirby said that 18 of the new barges are through the assumption of shipyard construction contracts from another inland tank barge operator and 11 are new orders placed by Kirby. Based on current prices, the cost of the new barges is estimated to be approximately $81 million.
The order comes in addition to 37 previously announced inland tank barges to be built this year with a total capacity of 390,000 barrels at a cost of approximately $45 million. Kirby also has approximately $45 million in progress payments on the construction of the 185,000 barrel coastal articulated tank barge and tugboat unit announced in January 2014 for delivery in mid to late 2015.
Including both orders, Kirby’s 2014 orderbook has jumped to a total capacity of 1.27 million barrels expected to be delivered this year.
Joe Pyne, Kirby’s Chairman and Chief Executive Officer, commented, “The 29 additional 30,000 barrel inland tank barges which are expected to be delivered this year will help to meet the additional volume requirements driven by strong and expanding movements of crude oil and natural gas condensate, as well as new demand from expansions in the petrochemical and refining industries.”
Pyne also commented on this particularly harsh winter that is just now starting to letting up, “Our first quarter guidance included some negative impact on our marine operations from the unfavorable winter weather we experienced during the month of January. Since early January, temperatures have primarily remained below freezing causing heavy ice on the Illinois, upper Mississippi and upper Ohio Rivers. We have continued to operate on these rivers despite the heavy ice conditions, but with additional horsepower or reduced tow sizes. We are not yet able to quantify the effect of the weather conditions on first quarter earnings, and we have also incurred a $.03 per share severance charge in the quarter, but we still expect earnings will be within the published guidance.”
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