Scorpio Bulkers and Scorpio Tankers, units of Scorpio Shipping Group, have signed letters of intent (LOIs) for the purchase and installation of scrubbers on the companies’ vessels.
The LOIs were inked with suppliers, engineering firms, and ship repair facilities and are subject the execution of definitive documentation, according to the two companies.
Following its entry into an agreement to retrofit fifteen of its LR2s with exhaust gas cleaning systems, Scorpio Tankers has agreed LOIs to cover the purchase and installation of scrubbers on substantially all of its remaining owned and financed leased LR2, LR1, and MR tanker vessels — approximately 75 vessels — between the second quarter of 2019 and the second quarter of 2020.
As informed, the scrubbers and their installation are expected to cost between USD 1.5 and USD 2.2 million per vessel, and the company anticipates that between 60-70% of these costs will be financed.
“We have long maintained that the IMO 2020 regulations are both disruptive to the shipping industry generally as well as a powerful demand catalyst for product tankers. Although many well-capitalized and publicly-listed shipowners can source capital and publicize their intentions to pursue scrubbers, most of our industry cannot, and will rely on cleaner fuels to the benefit of ton-mile demand for product tankers,” Emanuele Lauro, Chairman & CEO, commented.
“Irrespective, our focus remains on operating the most competitive fleet in our marketplace, and this has led us to carefully evaluate and ultimately opt for the benefits of fitting hybrid-ready scrubbers on approximately 90 ships in our fleet,” Lauro added.
Scorpio Tankers currently owns or finance leases 109 product tankers with an average age of 3.2 years and time or bareboat charters‐in 13 product tankers.
What is more, Scorpio Bulkers has agreed letters of intent to buy and install scrubbers on substantially all of its owned and finance leased Kamsarmax and Ultramax vessels from the second quarter of 2019 until the third quarter of 2020.
The purchase and installation of the systems will also cost between USD 1.5 and USD 2.2 million per vessel. It is anticipated that between 60-70% of these costs will be financed, Scorpio Bulkers said.
“Having cautiously and patiently evaluated various risks associated with this disruptive change to our industry, we are now confident that substantial savings can be realized,” Lauro further said.
Scorpio Bulkers has an operating fleet of 57 vessels consisting of 56 wholly-owned or finance leased drybulk vessels, and one time chartered-in Ultramax vessel. The company’s owned and finance leased fleet has a total carrying capacity of approximately 3.9 million dwt.