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Tsakos Energy Navigation signs $10m six-month VLCC storage contract

Tsakos Energy Navigation signs $10m six-month VLCC storage contract
Tsakos Energy Navigation (TEN) has announced that one of its VLCCs will spend six months storing oil for an international oil major.

The company expects proceeds of $10m from the deal, the like of which may well become more common in the tanker market as the short term price of oil sits below the expected longer-term price.

“Accretive transactions like the one announced today is proof of the strong tanker market currently in evidence due to the drop in oil prices, which on its own merit offers TEN significant benefits on two fronts," said George Saroglou, coo. "On the first, it allows for strong spot rates which our flexible and diversified fleet takes advantage of while on the second, it materially reduces voyage expenses.”

In a recent earnings call, competitor Euronav expressed its belief that up to 5% of the global VLCC fleet could be on storage contracts by the end of the first quarter, and up to 10% by the end of the second quarter 2015.