Monaco-based shipping group Scorpio is going all-in on exhaust gas scrubbers in to order to comply with the IMO’s 2020 sulphur cap.
Both Scorpio Tankers and Scorpio Bulkers on Monday announced plans to install scrubbers on a combined 146 vessels, including all 56 bulk vessels in Scorpio Bulkers’ fleet and 75 additional tankers Scorpio Tankers’ fleet. Scorpio Tankers already has in place agreements to install scrubbers on 15 of its tankers, bringing its total scrubber count to 90.
In both cases, Scorpio has entered into letters of intent with suppliers, engineering firms and ship repair facilities covering the purchase and installation of the systems at a cost of between $1.5 and $2.2 million per vessel.
Scorpio Bulkers said it will install the systems on substantially all of its owned and leased Kamsarmax and Ultramax bulk vessels, amounting to 56 vessels total. The insallations are expected to be completed between the second quarter of 2019 and the third quarter of 2020.
“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 and that- with this investment in our vessels- our fleet will remain the most competitive in our marketplace,” said Emanuele Lauro, who serves as Chairman and CEO of Scorpio Bulkers.
Scorpio Tankers will install scrubbers systems on all of its remaining owned and financed leased LR2, LR1, and MR tankers, comprising approximately 75 additional vessels. With the LoIs, Scorpio plans to have scrubbers installed on a total of approximately 90 vessels in its 109-vessel fleet. The company said installation of the scrubbers systems are expected to be completed between the second quarter of 2019 and the second quarter of 2020.
Emanuele Lauro also serves as Chairmain and CEO of Scorpio Tankers.
“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,” Lauro commented. “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. 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.”
Scorpio anticipates between 60-70% of the costs associated with the scrubbers will be financed.
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