TEN Sells Its Oldest VLCC for Scrap

Greek tanker owner and operator Tsakos Energy Navigation (TEN) has availed of the strong demolition prices to sell its oldest very large crude carrier.

The Panama-flagged VLCC Millennium, featuring 301,200 dwt, was built by Hyundai Heavy Industries (HHI) in 1998.

Based on the data from Vesselsvalue, the ship was sold in March fetching USD 447 per light displacement ton (ltd) and will be dismantled in Bangladesh.

“The Millennium has operated flawlessly and profitably since its newbuilding delivery exactly 20 years ago and was much in demand by many significant oil concerns throughout her life. The attractive price achieved combined with her age, provided us with the right opportunity to take advantage of the very strong recycling market, something other owners should consider as well,” George Saroglou, COO of TEN commented.

A total of 21 VLCCs were removed from the global fleet year to date, data from VesselsValue shows. The scrapping of veteran crude carrier giants already broke last year’s total of 13 ships mid-March with 16 VLCCs sent for demolition.

March was one of the busiest months for VLCC demolition, with a dozen of ships sent for scrap. Only one VLCC is reported to have been removed from the fleet in April this year.

Separately, TEN said that it has secured a minimum 12 maximum 24-months charter with an undisclosed oil major for an MR product tanker. The fixture of the MR is expected to generate approximately USD 10 million of gross revenues over the extended duration of the contract while the sale of the VLCC will generate USD 7.5 million of free cash after repayment of applicable debt.

“The fixture of the product tanker on the other hand, highlights TEN’s continuity and operational model as it provides security and visibility of cash flows and the enhancement of an existing relationship with a blue-chip client, this time on the product space,” Saroglou concluded.

TEN’s fleet consists of 64 double-hull vessels totaling 6.9 million dwt. Of these, 46 vessels trade in crude, 13 in products, three are shuttle tankers and two are LNG carriers.