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KNOT Offshore Partners LP
KNOT Offshore Partners LP listed on the NYSE in 2013, formed by Knutsen NYK Offshore Tankers AS (KNOT) to own and operate crude oil shuttle tankers.
KNOT Offshore Partners LP
KNOT Offshore Partners LP listed on the NYSE in 2013, formed by Knutsen NYK Offshore Tankers AS (KNOT) to own and operate crude oil shuttle tankers. The partnership was structured as a master limited partnership to distribute steady cash flows from long-term, fixed-rate charters with major energy producers. Derek Lowe has led the entity since 2017, navigating the volatility in offshore oil production. The fleet consists entirely of shuttle tankers, specialized vessels that load crude directly from floating production, storage and offloading units (FPSOs) or offshore platforms. The partnership serves the North Sea, Brazil, and the Norwegian Sea. Major counterparties have historically included Equinor, Petrobras, and TotalEnergies. Charters typically span five to fifteen years, insulating revenue from short-term commodity price swings. In May 2024, KNOT Offshore Partners completed a refinancing of its secured credit facilities, extending maturities and strengthening liquidity (per the firm, May 2024). Headquartered in Aberdeen, the partnership operates through a subsidiary structure managed by its sponsor, KNOT. The sponsor retains a significant minority stake and provides operational management of the vessels. The fleet includes technologically advanced dynamic-positioning shuttle tankers built in South Korean and Norwegian shipyards. A distinguishing feature of the partnership is the high barrier to entry in offshore loading. Shuttle tankers are a niche segment of marine infrastructure, requiring specialized technical capability and long-standing relationships with state-owned producers. The combination of an MLP structure, sponsor backing, and a mission-critical logistical role makes it unique within publicly listed maritime securities.
General information
Firm type
Asset Manager
Year founded
2013
AUM
Undisclosed
Location
Region
Europe
Country
United Kingdom
City
Aberdeen
Corporate office
Aberdeen, United Kingdom
Principals
Derek Lowe
Chief Executive Officer and Chief Financial Officer
Sector focus
Frequently asked questions
What type of vessels does KNOT Offshore Partners own?
The partnership owns and operates crude oil shuttle tankers equipped with dynamic positioning and bow-loading systems. These ships transport crude from offshore production units directly to onshore terminals, bypassing the need for pipeline infrastructure. As of 2024, the fleet comprises eighteen vessels serving fields in the North Sea and the Brazilian pre-salt basin.
Who are the key charter counterparties for the fleet?
Charters are held with major integrated energy producers and national oil companies. Historically, the counterparty list includes Equinor, Petrobras, TotalEnergies, and Shell under contracts averaging over five years. The concentration in Brazil and Norway reflects the shuttle tanker market's geographic constraints.
What is the relationship between KNOT Offshore Partners and Knutsen NYK Offshore Tankers?
KNOT Offshore Partners was formed as the drop-down vehicle for Knutsen NYK Offshore Tankers AS (KNOT), a joint venture between the Norwegian Knutsen Group and NYK Line of Japan. KNOT acts as the sponsor, owning the general partner interest and a significant limited partner stake. The sponsor provides vessel management, technical operations and crew training.
How does the MLP structure affect the investment profile?
The partnership is structured as a publicly traded master limited partnership listed on the New York Stock Exchange, which allows for high distribution payouts by minimizing entity-level taxation. Cash flows are distributed quarterly to unitholders, funded by the stable revenue from multi-year charter agreements. The structure appeals primarily to income-oriented investors due to the yield on those distributions.
Which geographic markets does the partnership serve?
Operations are concentrated in the North Sea and Brazil, two of the world's most active offshore production zones. The Norwegian sector of the North Sea requires shuttle tankers for fields not connected to the pipeline grid, while the Brazilian pre-salt fields rely on shuttle tankers for all of their export volumes.
Is the partnership exposed to spot oil prices?
Revenue exposure to spot oil prices is limited because nearly all charters are fixed-rate and long-term. The partnership's cash flow depends on fleet utilization and charter renewals rather than commodity price fluctuations. The sponsor's relationship with chartering entities is the main driver of vessel employment.
Who runs investment decisions at KNOT Offshore Partners?
Derek Lowe, the Chief Executive Officer and Chief Financial Officer, leads investment and financing decisions for the partnership. The board of directors, appointed by the sponsor-controlled general partner, oversees major fleet acquisitions and capital allocation. As a master limited partnership, governance rests with the general partner rather than common shareholders.
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