ECONOMY

Tsakos boosts ice fleet

LONDON (Reuters) – Greek oil tanker firm Tsakos Energy Navigation is rapidly expanding its fleet of icebreaking oil tankers to tap fast-growing oil shipping routes in the Baltic as they open up, its vice president told Reuters. The company, part of the larger Tsakos shipping empire, one of the biggest shipping families in Greece, has invested over $1 billion in icebreaking tankers, boosting the size of its specialized fleet to 24 by the close of 2007. «It used to be a very closed club and it wasn’t very easy to tell what the going freight rate was for an ice-class voyage,» George Saroglou, vice president and chief operating officer, told Reuters in an interview from his Athens office. «Now, with more and more players getting into this market, it will develop and we are poised to be part of that,» he said, adding that Russia still dominated oil transportation from the Baltic states using state-owned firms like Sovcomflot. «Russian firms have been the main carriers in ice-classed trades and the fleets of oil majors in the area, Finnish, Swedish and Norwegian, have also been major players.» Saroglou cited expansion at the terminals of Primorsk in the Gulf of Finland and Murmansk in the Barents Sea as evidence of a growing market for ice-class trades. He also said the development of Russian oilfields like Sakhalin and oil exploration in Canada and Alaska would also require the specialized ships. «We are paying a little bit extra to build icebreaking vessels, but the advantage is that they can operate in conventional environments too,» said Haris Cosmatos, senior manager of corporate development. Icebreaking ships can fetch a huge premium to operate in icy seas, two or three times the market rate, as happened at the close of 2004 when freight rates for oil smashed records. «But it’s not as if we are focusing 100 percent on that market. We want to have the available tonnage so when the opportunity comes we can capitalize on it,» Cosmatos said. «So it’s not that big of a risk for us if we get a bit of a delay in accessing those markets. They can still trade elsewhere,» he said. The company also said it was making an experimental foray into liquefied natural gas (LNG), another specialized energy shipping sector. «We want to be there when the market takes off,» said Cosmatos, explaining the firm’s decision to operate one LNG carrier. «LNG shipping markets will develop a spot market but that’s between a year and three years away,» Saroglou said. «So as LNG becomes more and more available and as new facilities come into play, we think its going to play a significant role,» he said.