KNOT Offshore Partners is expanding its shuttle tanker fleet and clearing a near-term debt maturity in a single $113m transaction, according to Splash247.
Acquisition and vessel details
The New York-listed partnership has agreed to acquire the vessel-owning company behind the 2024-built shuttle tanker Hedda Knutsen from its sponsor, Knutsen NYK Offshore Tankers. Splash247 reported that KNOT will assume $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 deal has been approved by the partnership’s board and its independent conflicts committee.
The 154,000 dwt DP2 (Dynamic Positioning Class 2) suezmax was built at COSCO Shipping Heavy Industry and is already deployed in Brazil for Petrobras. Firm employment runs until November 2034, with the Brazilian energy giant holding an option for another five years, potentially extending the charter into late 2039. The vessel was one of three shuttle tankers Knutsen NYK offered to its listed affiliate in June under the dropdown arrangements established when KNOT Offshore Partners floated. The independent committee opted against pursuing two of the ships but continued negotiations on the third — the Hedda Knutsen.
Fleet growth and Brazil exposure
Once the acquisition is completed, KNOT Offshore Partners’ fleet will rise from 19 to 20 shuttle tankers, continuing a steady refresh of its asset base. The fleet averaged 10.5 years of age at the end of the first quarter, when the company had $858m of fixed charter backlog with an average remaining firm duration of about 2.4 years, according to Splash247.
This is the fourth significant dropdown from Knutsen NYK since September 2024. The transactions are summarised below:
| Date | Vessel build year | Price | Notes |
|---|---|---|---|
| 2024 | 2021 | $97.5m | Older ship handed back to sponsor |
| March 2025 | 2021 | Not disclosed | Similar vessel swap |
| July 2025 | 2022 | $95m | Deployed in Brazil |
| August 2026 | 2024 | $113m | Assumes $89.4m debt, ~$24.4m cash cost |
The latest deal is particularly heavy on long-term Brazilian exposure. Beyond the Petrobras charter, Brazil remains one of KNOT’s two core markets alongside the North Sea. Management said earlier this year that shuttle tanker demand in both regions had been tightening on the back of FPSO (Floating Production Storage and Offloading) startups, production ramp-ups and new offshore developments, Splash247 reported.
Debt refinancing
The acquisition lands as the partnership also restructures its debt profile. Five vessel-owning subsidiaries have completed a $225m senior secured refinancing with DNB Bank acting as agent, replacing $225.8m of loans that were due next month. The new facility runs to June 2031, carries interest at SOFR (Secured Overnight Financing Rate) plus 1.65%, and is repayable over 20 quarterly instalments before a $111.1m balloon payment at maturity.
KNOT Offshore Partners had highlighted the refinancing as one of its main financial tasks this year. At its first-quarter results, management pointed to roughly $220m of debt coming due in September and another $65m facility in October, while saying the company was paying down debt at a rate of about $90m a year. The latest refinancing covers the larger of those two maturities, Splash247 said.
Implications for shippers and operators
For logistics and offshore supply chain stakeholders, the transaction adds a modern, long-chartered shuttle tanker to the active Brazilian market, supporting crude transfer operations tied to Petrobras’ production. The vessel’s firm employment through 2034, with a possible extension to 2039, provides multi-year certainty of capacity for the Brazil shuttle trade, one of the key offshore crude export routes. In the North Sea, KNOT’s other core region, fleet renewal and tightening demand driven by new offshore developments could pressure shuttle tanker availability in the medium term.
KNOT’s balance-sheet moves also matter for charterers and suppliers: the refinancing extends maturities on its facilities to 2031, while a separate $65m facility is due in October, according to the first-quarter figures reported by Splash247.
Watch list
- A $65m debt facility maturing in October remains on the company’s calendar, as the latest refinancing only addresses the September maturity.
- Knutsen NYK has contracted another 154,000 dwt shuttle tanker at COSCO Shipping Heavy Industry in Zhoushan — its 14th vessel with the Chinese yard — according to a March report by Splash247.
- Including ships under construction, the wider Knutsen-controlled shuttle tanker fleet numbers close to 40 vessels, with several more units scheduled to arrive through 2028.
- The dropdown mechanism remains active under the arrangements established at KNOT’s float, meaning further fleet-renewal transactions could follow.
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