4)Operating Leases

Revenues

The Partnership’s primary source of revenues is chartering its shuttle tankers to its customers. The Partnership primarily uses two types of contracts, time charter contracts and bareboat charter contracts. The Partnership’s time charter contracts include both a lease component, consisting of the bareboat element of the contract, and non-lease component, consisting of operation of the Vessel for the customers, which includes providing the crewing and other services related to the Vessel’s operations, the cost of which is included in the daily hire rate, except when off hire.

The following table presents the Partnership’s revenues by time charter and bareboat charters and other revenues for the three and six months ended June 30, 2026 and 2025:

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As of June 30, 2026, the minimum contractual future revenues to be received from time charters and bareboat charters during the next five years and thereafter are as follows (including service element of the time charter, but excluding unexercised customer option periods and excluding any contracted revenues signed after June 30, 2026):

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The minimum contractual future revenues should not be construed to reflect total charter hire revenues for any of the years. Minimum contractual future revenues are calculated based on certain assumptions such as operating days per year. In addition, minimum contractual future revenues presented in the table above have not been reduced by estimated off hire time for periodic maintenance. The amounts may vary given unscheduled future events such as vessel maintenance.

The Partnership’s fleet as of June 30, 2026 consisted of:

Furthermore, on September 1, 2026, the Partnership acquired from KNOT all of the outstanding shares in the owner of the Hedda Knutsen, a shuttle tanker built in 2024 that is currently operating under a time charter contract with Petrobras that expires in November 2034, with options for the charterer to extend the charter until November 2039. See Note 22–Subsequent Events.

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Lease obligations

The Partnership does not have any material leased assets but has some leased equipment on operational leases on the various ships operating on time charter contracts. As of June 30, 2026, the right-of-use asset and lease liability for operating leases was $0.7 million and are presented as separate line items on the balance sheets. The operating lease cost and corresponding cash flow effect for the three and six months ended June 30, 2026, was $0.1 million and $0.2 million, respectively. As of June 30, 2026, the weighted average discount rate for the operating leases was 6.35% and was determined using the expected incremental borrowing rate for a loan facility of similar term. As of June 30, 2026, the weighted average remaining lease term is 1.6 years.

A maturity analysis of the Partnership’s lease liabilities from leased-in equipment as of June 30, 2026 is as follows:

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