TEN Orders1A Ice-Class Suezmaxes
Wednesday, February 11, 2004
Tsakos Energy Navigation Limited (TEN) announced that it has ordered two suezmax, double hull, 1A ice-class tankers, with carrying capacity of 162,400 dwt each. The vessels are scheduled for delivery in the first half of 2007.
Both vessels are to be constructed by Hyundai Heavy Industries (HHI), and represent the 26th and 27th vessels in TEN's newbuilding program since 1997. The vessels are specifically designed to meet the stringent requirements of classification societies and other regulatory bodies, the rules and guidelines of oil majors and various port authorities and terminals relating to environmental protection. Additionally, the 1A ice class specification ensures that the vessels will be able to operate in ice blocked ports.
"The innovative design of these environmentally friendly, 1A ice-class vessels, signifies the next phase of our newbuilding program," said Nikolas P. Tsakos, President and CEO of TEN. "Like the handysize contracts we announced in late January, we expect these vessels will have the opportunity to earn a significant premium for their unique capabilities."
TEN's management believes that these vessels will be in heavy demand by Russian, Finnish and Canadian based oil majors and charterers in the near future, especially as many developing oilfields and ports currently under development in Russia, Eastern Siberia and Alaska will start producing oil and will require these specialized tankers for its transportation. Because ice- class vessels operate in a niche market, they can carry a substantial freight premium.
Including the contract announced today, TEN expects its fleet to grow to 39 vessels by the end of 2007. Out of the 28 vessels currently trading, 21 operate with medium or long-term employment contracts, some at variable rates, accounting for 65% of the operating days for 2004. These contracts will generate a minimum of approximately $135 million in revenues, which should provide a sustainable flow of earnings and enhanced shareholder value. The company currently employs its remaining 7 vessels in the spot market, including the new VLCC. Currently, 90% of TEN's fleet is of the double hull design.