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March 31, 2004

Tsakos enters LNG arena

Tsakos Energy Navigation Limited (TEN) (NYSE: TNP) is entering the LNG arena. It has announced that it has signed a Letter of Intent (LOI) for the construction of one LNG tanker of 145,000 cubic meter capacity for delivery in July 2007. The LOI also provides for an option for an additional vessel for delivery later that year. These newbuilds would represent TEN's first orders for vessels in the rapidly growing LNG market.

The Tsakos statement says only that the agreement is "with a shipyard specializing in the building of Liquefied Natural Gas (LNG) tankers." It is understood that the yard is, in fact, South Korea's Hyundai Heavy Industries

President and CEO Nikolas Tsakos commented: "LNG currently represents one of the fastest growing shipping segments in the global energy market. In 2003, the global LNG trade grew by 13% and is expected to double by 2010. Low cost natural gas reserves in the Middle East and Africa, combined with a decreasing cost structure of the LNG process, will allow large-scale expansion of the trade. With the vessels announced today, TEN is poised to join a select group of operators who will be able to take advantage of this growing market segment."

The current LNG carrier market appears very fragmented, says TEN. with only 40 owners operating 160 vessels, and is characterized by long-term contracts that typically average about 20 years. The long-term fundamentals of this sector are sound, as most LNG vessels currently on order (approximately 60 vessels) are already dedicated to satisfy the transportation needs of specific existing LNG projects. Current market estimates project demand growth for LNG tankers to exceed the current orderbook by 100 vessels by 2010. Increased competition for shipyard capacity from tankers, bulkers and containerships has resulted in a shortage in LNG shipbuilding capacity.

"The announcement of this letter of intent begins a new chapter in the history of TEN," Tsakos continued. "Our commitment to a diversified fleet to meet the growing needs of our clients will be further enhanced by our ability to serve the LNG market. Looking to the future, we are confident that the global demand for these types of vessels will increase dramatically. The high-spec nature of these LNG carriers, as well as the 10 ice-class vessels that we currently have on order, will provide for significant charter premiums, increased earnings and shareholder returns."

Including options and the LNG carriers announced today, TEN's fleet is expected to grow to 44 vessels by the end of 2007. Out of the 28 vessels currently trading, 22 operate with medium or long-term employment contracts, some at variable rates, accounting for 70% of the operating days for 2004, and 56% of the operating days of 2005. These contracts will generate a minimum of approximately $140 million in revenues for 2004 and $110 million for 2005, which should provide a sustainable flow of earnings. The company currently employs its remaining 6 vessels in the spot market. Currently, 90% of TEN's fleet is of the double hull design.

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