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General Dynamics NASSCO signalled the start of construction of a second 'eco' tanker to be built for American Petroleum Tankers at a steel cutting ceremony at NASSCO's San Diego-based shipyard.

U.S. congressman Scott Peters signalled the beginning of construction by pressing a button to cut the first piece of steel. NASSCO began construction on the first tanker in September 2014.

The latest vessel forms part of a five-tanker contract with American Petroleum Tankers to design, build and operate innovative, energy-efficient and fuel-saving ships.

Each of the five 50,000 deadweight tonne (dwt) product carriers are to be built as LNG-conversion-ready vessels with a 330,000-barrel cargo capacity.

"NASSCO is providing our customers with some of the most energy-efficient, fuel-saving, and cost-effective tankers in the world," said Kevin Graney, vice president and general manager of General Dynamics NASSCO. "The construction of the first tanker for American Petroleum Tankers is well underway at NASSCO and we are pleased to begin construction on a second tanker for the company today."

"This second tanker marks another milestone in our fleet expansion adding five state-of-the-art vessels constructed and delivered by NASSCO," said Rob Kurz, vice president of Kinder Morgan Terminals and president of American Petroleum Tankers, a Kinder Morgan, Inc. subsidiary. "The expansion is a result of the commitment of our customers through their long-term charter support. We look forward to delivery of the vessels in mid-2017."

The new construction and operation of the new vessels are aligned with the Jones Act, requiring ships carrying cargo between U.S. ports to be built, crewed and owned by the U.S.