Tsakos Energy Navigation Limited (NYSE: TNP) is a tanker company that transports crude oil and petroleum. In the beginning of 2008, the company had an operational fleet of 43 vessels, nearly half of which were specially strengthened to be able to sail through icy waters. This special ice certification allows TNP to take advantage of the growing number of exports from the Baltic Sea.
Although the Baltic states are not important energy consumers or producers, together they occupy a key transit location for Russian oil exports. The Russian crude oil pipeline system is connected to three ports on the Baltic Sea: Latvia's port of Ventspils, Lithuania's port of Butinge, and the Russian port of Primorsk. Oil exports are a critical factor underlying Russia's recent economic growth, and a key bottleneck for this growth is the availability of viable export routes. The flagship Port of Primorsk, near St. Petersburg, transited 1.3 Million barrels per day (bbl/d) of crude oil in 2006, or roughly 19% of Russia's net exports that year, and the U.S. Department of Energy expects that number will grow to 3 million bbl/d as new pipelines to the port come online. Because the Baltic sea is 45% covered in ice during winter months, only ice-capable ships such as those owned by Tsakos are able to transport this Russian oil.
From 2005 through early 2008, the number of tankers and the overall tonnage available to transport crude oil grew faster than world oil demand, driving down the spot rates for tanker services. TNP, however, generates more of its revenue from long term contracts than its competitors and as a result, has continued to grow both revenue and net income over the same time period.
TNP's fleet consists of 19 crude oil transport vessels and 23 petroleum product carriers as of March 2008. All of these ships are double-hulled, making them less vulnerable to oil spills than single-hulled ships. Additionally, 23 of the vessels in the fleet have some kind of ice class rating, meaning that they are able to navigate iced-water. (This will let TNP take advantage of increasing cargo from the Baltic Sea area.) The company has also taken care to lower the average age of its fleet from 7.5 years in 2004 to 4.5 years as of March 2008. The size of the fleet over the same period has increased from 2.92 million Deadweight tonnes to 4.63 million deadweight tonnes. 
The chart below breaks down TNP's fleet deployment. TNP's strategy has been to aim for a balance of fleet deployment so that the company will be able to take advantage of high rates through the spot market and period employment while also maintaining a steady cash flow from its time charter activities.
TNP's vessels operate all over the world. A map of operations as of March 31, 2007 can be found on page 22 of the company's 2006 annual report.
Some of TNP's major competitors include:
TNP distinguishes itself from its competitors by maintaining a fleet that is diverse and largely capable of traveling through icy waters. Its chartering strategy also ensures that the company will maintain cash flows even in down-cycles for the tanker industry. Like its competitors, it is constantly expanding its fleet.
|Company||Ships owned||Ships chartered||Total DWT (millions)|
Note that dwts measure shipping capacity.