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Tsakos Energy Navigation And Flopec Form Strategic Alliance
Under the terms of the agreement, TEN has chartered two of its recently delivered double-double coated Panamaxes to FLOPEC. Each contract is for an initial 26 months at accretive minimum rates with significant opportunity for rate increases based on prevailing market dynamics. At the expiry of the initial period, both contracts become evergreen.
"Ecuador is a growing producer of high quality crude oil and an important supplier to the United States," said Nikolas Tsakos, President and CEO of TEN. "This latest stage of a growing strategic alliance benefits both parties. FLOPEC has chartered two of our most modern vessels, allowing for faster, safer and more economical transport of cargoes. For TEN, these new contracts serve as an opportunity to expand our relationships and our reach in this region."
TEN has been building a solid business relationship with FLOPEC and PETROECUADOR for many years. Other TEN vessels have been operating in the region including product tankers and other panamaxes.
Mr. Tsakos continued, "These contracts further illustrate that we are executing our strategy of seeking the optimum balance between medium- to long-term charters and spot market employment for our growing, modern fleet. TEN intends to continue to enhance its global relationships with its clients by building ships that meet their individual requirements and providing superior customer service and support directly to these major oil producers. Such alliances will allow TEN to maintain predictable streams of revenue, which should serve to enhance shareholder value."
Currently, TEN has fixed employment for its fleet for 70% and 40% of the remaining operating days in 2003 and 2004, respectively. TEN significant newbuilding program continues on schedule. Three vessels have already been delivered this year, with three more expected by the end of 2003. An additional three vessels are also scheduled for delivery in 2004.
ABOUT TSAKOS ENERGY NAVIGATION
TEN currently operates a fleet of 25 tankers (including one chartered-in aframax and one chartered-in product carrier) comprising 2,470,000 DWT with an average age of 6.4 years, which TEN believes is much younger than the world's tanker tonnage, which has an average age of 12.4 years. Additionally, following delivery of the previously announced Maya, Marathon and Inca, TEN is scheduled to take delivery of a further six newbuildings. With these six newbuildings (one aframax, two panamaxes and three handysize product tankers) the average pro-forma age of the fleet will be 7.4 years in March 2005. The resulting fleet of 30 vessels (including only one chartered-in vessel, an aframax) with 2,792,715 DWT will include 19 newbuildings (1997-2004) with 2,093,000 DWT. In addition, since October 2002 TEN has entered into a strategic joint venture with Lauritzen Kosan A/S of Denmark, initially jointly owning four modern LPG carriers. Consistent with the Company's strategy, to offer its customers a young and growing fleet, TEN will seek additional attractive opportunities to contract for new vessels and to dispose of older vessels.