JP Morgan-controlled Schuyler Line Navigation has won a charter deal with the US Navy that could be worth $71m if all options are exercised.
The US Defense Department said the Maryland-based operator will earn $17.2m for the fixed portion of the contract for a vessel that can carry up to 38,500 barrels.
Schuyler can charter a US-flag vessel to the Navy’s Military Sealift Command, or it can use a foreign-flag vessel that is registered under the Stars and Stripes before the contract begins.
The contract involves a firm period of 12 months, followed by three optional periods of one year.
As is common in navy tanker contracts, there is an option for a final 11-month period.
The contract will stretch out to September 2028 if all options are exercised.
The vessel will operate in the Far East, where US forces have been building up their capacity to transport fuel for the fleet.
“This contract was competitively procured under full and open competition,” the Defense Department said.
The deal comes after JP Morgan, a major US bank, announced last month that it purchased Bold Ocean, which is Schuyler Line’s parent.
JP Morgan Asset Management controls 140 vessels across every major shipping sector under the direction of Andy Dacy, who has described his approach to the job as that of a shipowner more than a banker.
“We expect the US to increasingly focus on ensuring that it has robust access to shipping and logistics assets,” Dacy told TradeWinds in August.
“Changes in shipping technology are having commensurate impacts on the existing US-flag market and are expected to lead to fleet renewal requirements in this segment.”
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