Aker Philadelphia Shipyard has an agreement to build up to eight product tankers for Crowley Maritime Corp. of Jacksonville, Fla., that could keep the yard busy through 2017.
Under terms of a joint business venture, Aker signed a $500 million contract with Crowley to build the first four 330,000-barrel tankers, to be completed in 2015 and 2016.
The companies agreed to options for a possible four additional tankers.
After several lean years, Aker's workforce is back to 1,000 at the Navy Yard. The nation's second-largest commercial shipbuilder is constructing two crude-oil tankers for Exxon Mobil Corp. affiliate SeaRiver Maritime Inc. that will be ready next year.
Under the deal with Crowley, Aker will invest $115 million in the first four ships through a combination of existing shipyard equity and new debt.
Crowley will maintain control over the ownership, technical operation, and commercial management of the ships. Aker and Crowley will share in the economics of operating and chartering the vessels, the companies said.
Production of Bakken crude oil from shale in North Dakota and Texas has increased the demand for U.S.-flagged ships to transport oil, gasoline, and chemicals. Aker builds ships that operate in U.S. waters under the Jones Act, which requires U.S.-flagged ships for operations among U.S. ports.
"The shale revolution is creating industrial opportunities throughout the United States and specifically here in Philadelphia," said Aker Shipyard chief executive officer Kristian Rokke. "We are pleased to expand our partnership with a first-class operator like Crowley to help meet the nation's long-standing goal of energy security.
"This strategic opportunity allows us to capitalize on the increased demand for Jones Act tankers in a way that will transform" the shipyard in coming years, Rokke said.
Tom Crowley, Crowley Maritime chairman and CEO, said: "Through this expansion and cooperative agreement with Aker, we will be providing our customers with more options for transporting their product with greater safety and efficiency."
Rob Grune, Crowley senior vice president and general manager for petroleum services, added: "We appreciate working with Aker to supply our customers and the nation with the necessary tonnage to bring U.S. petroleum to market."
The ships, capable of carrying 50,000 tons, will be built on a Hyundai Mipo Dockyards design, the same Aker used to build 14 product tankers between 2005 and 2013. Construction on the first Crowley tanker will begin in January.
"It's all very good news," Aker senior vice president Scott Clapham said. "The economic crisis was hard. We got some assistance from our partners at the commonwealth and the city. We won the SeaRiver contracts, and now we've won these contracts."
In February 2011, Aker received $42 million from Pennsylvania taxpayers to construct two oceangoing vessels, though it had no buyers lined up. Without state money - and private construction financing Aker secured - the yard might have ceased operations.
Shipbuilding worldwide stalled during the global recession, and the lull triggered more than 600 layoffs at Aker.
In August 2012, the company announced it had sold the two ships it built "on spec" to Crowley.
"It's great for the city of Philadelphia; it's great for the workers at the shipyard," Philadelphia Metal Trades Council president Lou Agre said of the deal to build at least four more ships. "Kristian Rokke is a sharp guy."
"We're very happy there's going to be continued full employment at the shipyard," Agre said. "Hopefully, they will hire more local people, and get rid of some of the subcontractors from out of state. We are working on a program to get more veterans hired."