OSG Sees Reflagging Tanker Newbuilds Under U.S. Ship Registry

Photo courtesy Overseas Shipholding Group

Overseas Shipholding Group has taken delivery of two Korean-built product tankers which the company anticipates will join the U.S. flag after an initial one-year charter.

The two 50,000 DWT tankers, named Overseas Gulf Coast and Overseas Sun Coast, were delivered this week by Hyundai Mipo Dockyard in Ulsan, South Korea. Both were built to comply with MARPOL Annex VI Regulation 13 Tier III standards and are equipped an exhaust gas cleaning system, aka “scrubber”, to meet the standards of MARPOL Annex VI Regulation 14.

OSG says the tankers will initially be operating in the international market under the Marshall Islands flag under one-year time charters. After that, OSG says it anticipates the vessels will transition to operate under the U.S. flag, potentially taking part in a proposed U.S. government tanker program supporting U.S. national security and defense needs.

“An important – although still provisional – initiative in the U.S. House of Representatives’ annual National Defense Authorization Act seeks to augment the current Maritime Security Program with a new Tanker Security Program,” said OSG’s President and CEO Sam Norton. “Our commitment to supporting this initiative, and the national defense objectives which it targets, is most visibly evident in our investments in the Overseas Gulf Coast and Overseas Sun Coast. Both vessels will be made available to join this program if passed into law in the coming months.”

Under the proposed program, the U.S. would provide an annual stipend to maintain a fleet of ten U.S. flagged MR tankers commencing in 2021, similar to the existing Maritime Security Program. Like the MSP, the tanker program will allow vessels to be built outside the United States and reflagged under the U.S. flag.