Must-know: An overview of Tsakos Energy Navigation (Part 2 of 7)
As of July, 2014, the Tsakos Energy Navigation (or TNP) fleet, including the liquefied natural gas (or LNG) carrier Maria Energy and nine Aframax crude oil tankers under construction, consists of 60 double-hull vessels, a mix of crude tankers, product tankers, and LNG carriers, totaling 6.2 million deadweight tonnage (or dwt). Of these, 30 are crude carriers ranging from VLCCs to Aframaxes, 28 are product tankers ranging from DP2 shuttle suezmaxes to handysize, 14 of which are currently carrying crude cargoes, and two are LNG carriers.
Recently, TNP announced the delivery of the 2013 and 2012-built suezmaxes, Eurovison, and Euro, sister-vessels to the 2011-built Spyros K and Dimitris P.
TNP has 100% double hull against 96% of world fleet. Meanwhile, its average fleet age—excluding the two to be delivered—stands at 7.3 years as against 9.1 years of world fleet.
Newly acquired vessels
Tsakos’ newly acquired Euro is currently on a remaining 16-month charter to a major U.S. oil company at a rate with escalation features. It’s expected gross revenues are ~$12 million, while the Spyros K and the Dimitris P are under nine-year, on average, remaining contracts with profit sharing provisions to a major far eastern concern with expected minimum revenues of $142 million.
In total, three of the four sister-vessels have secured forward minimum gross revenues of ~$154 million while the third, the Eurovision, is taking advantage of the spot market. The performance of these new acquisitions will start to be reflected in the third quarter this year and in full beginning in the fourth quarter.
LNG and offshore shuttle tanker platform
The LNG or Shuttle tanker foothold led to attaining early mover advantage and favorable market conditions.
In March and April, 2013, Tsakos took delivery of two suezmax DP2 shuttle tankers to operate on long-term charters with one of the largest developers of offshore oil fields. Meanwhile, TNK believes that it’s well positioned to capitalize on rising demand for LNG sea transport and offshore shuttle tanker transport because of our extensive relationships with existing customers, strong safety track record, superior technical management capabilities, and financial flexibility. Also, it operates one LNG carrier and has a second LNG on order for delivery in 2016.
Meanwhile, currently TNP is under discussions to construct additional vessels in both the LNG and the shuttle tanker sector.
The company has peers like DHT Holdings Inc. (DHT), Teekay Tankers Ltd. (TNK), Navios Maritime Acquisition (NNA), and Nordic American Tankers (NAT). The Guggenheim Shipping ETF (SEA) tracks the shipping companies.
Let’s discuss the details about the company’s chartering strategy.
Browse this series on Market Realist:
- Part 1 - Overview: Tsakos Energy Navigation
- Part 3 - Why the chartering strategy supports growth and dividend
- Part 4 - Tsakos’ highly skilled management enhancing investment strategies
- Investment & Company Information