Overseas Shipholding Group Inc. (OSG) exercised an option to construct a second 204,000-bbl. oil and chemical ATB barge at Gunderson Marine LLC, Portland, Ore.

The barge, scheduled for delivery in the second half of 2020, will be designed and built to be paired with one of the company’s existing tugs, replacing a rebuilt barge unit which is expected to be phased out of service prior to delivery of the new barge. Each of the two barges contracted with Gunderson will be of identical design, meeting all of the latest safety and environmental requirements. The OSG intends to finance the construction of the two barges with a combination of existing cash and future debt financing.

“OSG is pleased to have taken this step to further ensure a continued leading presence in the U.S.-flag petroleum transportation sector,” Sam Norton, OSG’s president and CEO, said in a statement announcing the exercised option. “The larger barge capacity offered by OSG’s Gunderson design, as compared to most of the other available modern units, should give our barges a competitive edge on a dollar per delivered barrel cost across almost all voyages. With the addition of these modern, efficient and environmentally responsible vessels to our existing fleet, we have increased confidence in our ongoing ability to offer our core customer base both the assets and the quality of service that they demand.”

No additional details about the barges were announced.

OSG is a publicly traded tanker company that provides energy transportation services for crude oil and petroleum products in the U.S.-flag markets. The company is an operator of tankers and ATBs in the Jones Act industry. OSG’s 21 vessel U.S.-flag fleet consists of five ATBs, two lightering ATBs, three shuttle tankers, nine MR tankers, and two non-Jones Act medium-range (MR) tankers that participate in the U.S. Maritime Security Program.

In addition to its current fleet, OSG has on order two additional non-Jones Act MR tankers and two Jones Act compliant barges, scheduled for delivery in 2019 and 2020 respectively.